Steve McNair's Messy Estate

07/19/2010

My wife said I am doing too many “legal sports” blogs so this will be the last athletic related blog (at least for a little while). 

We just passed the year anniversary of the murder of former Tennessee Titians quarterback Steve McNair.  The one lesson we should all learn from his death is that the failure to have an estate plan could leave a legal mess for the loved ones left behind. 

When Steve McNair was killed, he did not have a Will, Trust, or any estate planning documents.  And as of today – over a year after his death – things do not even look close to being settled.

First, it is still unclear who will inherit what from Steve McNair's estate. McNair was married when he died, but it is a common misconception that a surviving spouse will inherit 100% of the deceased spouse's separate assets even if the deceased spouse dies without a Will. In McNair’s case, a probate judge will have to determine who is McNair's rightful heirs aside from his wife and his two known sons since he allegedly was the father of other children born out of wedlock.  If McNair had an estate plan, a fight of who would benefit from his estate could have easily been avoided.

Even after the beneficiaries have been determined, it still must be decided what each beneficiary will receive from the estate and how they will receive it.  Minor beneficiaries are probably looking at court-supervised guardianships for their shares.  Again, this could have been avoided with proper planning.

From an estate tax perspective (remember McNair died in 2009 when we still had an estate tax) reports are that in April 2010, the estate paid federal estate taxes of a little under $4 million.  With just a little bit of planning, estate taxes could have been completely avoided on McNair’s death.

Finally, it is unclear what will happen to McNair's charitable foundation which was supposedly very near and dear to his heart.  The website for the foundation indicates that the charity is still taking donations although there have been no recent foundation events. With the estate tied up, McNair’s wife cannot even offer any type of monetary support to the foundation on behalf of her late husband.

The sad but true reality is that even with the most simple estate plan Steve McNair could have protected his wife and children, left an ongoing legacy for his foundation, and eliminated all of the estate taxes. A truly valuable estate planning lesson for us all.