Wendy and Jen Wreck the Movies – Uptown Girls (2003), Or Even Rock Stars Need Estate Planning

What Happened:

Uptown Girls begins as all fairy tales should:

“There was once a princess who lived in a castle high above the streets of an enchanted kingdom (New York). The king and queen were long gone but they left her with their treasure so that she could stay a princess forever…”

Some people thought Princess Molly Gunn (played by Brittany Murphy) lived a dream life. Other people thought Molly was a 22-year-old, looking for love in all the wrong places, with a dirty apartment, no marketable skills and living life way too fast.

And so it was that on her 22^nd birthday Molly retrieved some cash from her icebox and pranced down the rose-filled hallway of her luxury apartment building on her way to another night of fabulous excess. Molly danced the night away, met a beautiful boy, and then the lights went out.  Well, the lights didn’t go out so much as they were turned off.  Actually, all of the electricity was turned off because a wicked troll (a/k/a Molly’s business manager Bob) had vanished with the treasure left to Molly by her parents.  Now at 22, an age when most adults are finishing college or beginning their professional life, Molly is forced to get a job as a nanny for a precocious girl (played by a young Dakota Fanning).

What a nightmare.

What Should Have Happened:

As we all know, modern day fairy tales are excellent cautionary estate planning tales, especially when rewritten by Wendy and Jen.

Tommy Gunn and his wife were rockstars who travelled the world.  They worried about who would take care of their darling little girl if something happened to them.  Luckily, they ran into Wendy and Jen at the movies. The Gunns were delighted to learn that Wendy and Jen were attorneys who not only helped people create plans to care for their loved ones, but they also had partners who advised on intellectual property, music royalties and copyrights.  They quickly made an appointment to see Wendy and Jen at their office.

Wendy and Jen listened to the Gunns’ worries and their wishes for their daughter Molly.  The Gunns were worried that Molly, would be exploited and left penniless if she was orphaned at a young age.  The Gunns had watched Molly spend her weekly her allowance as soon as she got it, and they were very concerned that Molly might not learn financial responsibility until she was well into adulthood.

The Gunns retained Wendy and Jen, who drafted comprehensive estate planning documents for them including a comprehensive trust which stated that if they both died, all of their assets would be held in trust for Molly until she turned 45.  The trust also provided that if there were unusual circumstances in Molly’s life when she turned 45 (i.e. in the midst of a divorce or in bankruptcy) the trustee could continue the trust to further protect Molly. To safeguard the trust assets, the trustee was required to post a surety bond to guard against misconduct. The trustee was also required to account to the surety company and Molly’s guardian until she was 18, and then to Molly when she became an adult.

Because Molly did not have control over the trust it was protected from creditors. Also, if Molly married and divorced, the trust was outside of the reach of any gold-digging ne’er do well.  The trust even included rewards to Molly for achievements and milestones.  For example, if Molly graduates high school in the top 25% or her class, the trustee could buy her a car and give her an outright distribution of $25,000.  If Molly graduates college within five years of her high school graduation, the trustee could buy her an apartment and give her an outright distribution of $50,000.

The Gunns also executed a last will and testament that named a guardian to take care of Molly until she turned 18. Wisely, the trustee and the guardian were not the same person, which gave Molly added protection against fiduciary self-dealing.

The Gunns also took additional steps to prevent the trustee from borrowing or taking advances against their royalties. They created LLCs and transferred their copyrights and royalty contracts to the LLCs.  The LLCs were also held in trust.

Sadly, the Gunns’ fears were realized and they died when Molly was a little girl. But, because the Gunns had planned thoughtfully, Molly was raised by a kind and loving fairy godmother, and the trustee carefully managed the trust. Molly graduated in the top 10% of her high school class and went on to graduate from college.  After earning an MBA, Molly founded Molly’s Nurturing Nannies, a childcare staffing company. Before her twenty-fifth birthday Molly took Molly’s Nurturing Nannies public, and Molly became one of the youngest self-made billionaires in history.  When Molly turned 45, she received the trust outright and continued living her life as a happy well-balanced adult.

And she lived happily ever after.

It is not just rock stars that need to plan for the future.  It is important for all parents to plan for how their children will be taken care of if the worst happens.

Save the drama from the movies.