Jimi Hendrix and David Bowie were two of the greatest rock legends who ever lived. We know a lot about them and the music they created while they were alive. However, most of us do not know what happened to their estates after they passed. Let’s take a deeper dive into their estate plans and learn the lessons of these two rockers.
Let’s begin with Bowie, especially since his death is so fresh. On January 10, David Robert Jones, also known as David Bowie, passed away from liver cancer just two days after his newest album, “Blackstar,“ was released.
In the 1970s and ‘80s, Bowie suffered hard financial times. It was even reported that Bowie was on the verge of bankruptcy. In 1997, as Bowie was contemplating his financial options, he met with investment banker David Pullman who turned him on to an amazing idea.
Pullman convinced Bowie to sell a stake in his music, but only for a short time. Pullman helped Bowie create “Bowie Bonds,” whereby Bowie sold rights to his music for a 10-year period for $55 million, and Bowie promised a fixed rate of return of 7.9 percent. The Bowie Bonds were secured through Bowie’s royalties and copyrights of his own music. Prudential Insurance Company purchased the bonds and was paid in full during the 10-year time frame. In 2007, Bowie retained the rights to all of his own music.
The amazing part about Bowie’s revolutionary estate planning move related to Bowie’s motives. In a recent interview, Mr. Pullman emphasized that Bowie created these bonds, not for his own benefit, but to ensure that his wife, Iman, and his two children would be set for the rest of their lives.
Bowie’s estate is thought to be worth more than $200 million (although a recent estimate put it closer to $100 million), with almost half of his estate going to his wife, Iman, almost half to his children, and a few specific bequests to friends. It appears Bowie used a will and not a revocable living trust in his estate plan, but this could change as we learn more about Bowie’s plan. Either way, Bowie used powerful planning strategies to save his family from the verge of financial ruin.
On the other hand, Jimi Hendrix, who died in 1970, also had an estate plan, but it wasn’t his own. Hendrix died without a will, and therefore, his estate plan was the plan forced upon his heirs by the State of Washington. According to that state’s laws of intestacy (dying without a will), Jimi’s father Al was to inherit his entire estate.
At first blush that might not seem like a bad result. However, when Al died in 2002, he did have a will and that will left everything to Al’s adopted daughter, Janie, and not to Jimi’s brother Leon. Leon contested Al’s will, and Janie and Leon fought over Jimi’s $80 million estate from Al’s death in 2002 for almost 13 years. They only recently settled (for now) in July of 2015.
Hendrix’s life is shrouded in mystery, but one thing we can be sure of was the fact he did not want his siblings fighting over his money for decades. As an estate-planning attorney, I see cases like this all of the time, especially when people die without wills or with outdated wills.
David Bowie and Jimi Hendrix teach us the importance of deliberate planning during our lifetimes. Bowie planned well, and his family is going to reap the benefits of his excellent, professionally guided planning. Jimi did no planning and his family fought over his estate for years (they might still be fighting). When it comes to estate planning, be like Bowie—and not like Hendrix.
Alec Borenstein, Esq., an estate planning attorney, is a Teaneck resident with offices in Springfield and Brooklyn. His firm’s website is bmcestateplanning.com. If you’d like a free estate-planning consultation in the comfort of your own home or office, please email [email protected].
By Alec Borenstein