By Sarah Stewart Legal Group
We are all familiar with the name Aaron Hernandez, but allow me to give you a brief reminder. Hernandez played tight end for the New England Patriots. His career came to a screeching halt in 2013 when he made national headlines for his indictment in the murder of Odin Lloyd. In 2015, Hernandez was found guilty of first-degree murder in the Lloyd death and charged with 2 additional counts of murder for a 2012 double homicide in Boston.
His trial for the double-murder began in March 2017. In April, shortly after he was acquitted in the Boston deaths, he was found dead in his jail cell, apparently from suicide.
Since his death, his estate has been burdened with debt and other problems. Recently, the Judge in his estate case, ordered disclosure of a secret trust, set up by Hernandez on behalf of his 5 year old daughter. The “AJH Irrevocable Trust” is rumored to house many of Hernandez’s assets to protect them on his daughter’s behalf from his creditors.
Hernandez’s estate is insolvent, in that he owes roughly $2.8 million in debts, but only has $1.2 million in assets. The trust, unless found to be a fraudulent conveyance to thwart creditors, will fall outside of the estate and be free from the creditors’ grasps.
An irrevocable trust is a vehicle where the creator gives certain assets to a trustee to hold for the benefit of one or more beneficiaries. Since the assets are no longer within the creator’s control, they are no longer subject to the creator’s creditor claims. This was a smart move on Hernandez’s part, since the families of the 3 murder victims are bringing law suits, his attorneys are calling in their legal fees, and the government is issuing tax liens on his property.
Trusts are living, changing documents that can be twisted and turned to meet the drafter’s wishes, whatever they may be. Trusts of any kind are useful tools to consider in your own family wealth and estate plans.