Be like David Bowie

David Bowie enjoyed a diverse, colourful, and successful career remaining on the cutting edge of art and music until he released his final album Black star days before he died earlier this year.

Born in Brixton, south London as David Robert Jones, he had a solid middle class upbringing that only hinted at the kind of artist that he would become. His chameleon like image, music and persona(s) made David a true one-of-a-kind, and this extended to the management of his estate and finances.

As a young artist David signed a management deal that left him struggling financially throughout the 1970′s and early 80′s. In the early 1990’s David sold a stake in his catalogue of music.

In a novel departure instead of selling his songwriting, performance, and licensing rights to his many successful songs outright David created “Bowie Bonds” which operated like an annuity guaranteeing investors a fixed 7.9% return over 10 years secured by all of his royalties and copyrights from the music for $55 million.

Prudential Insurance Co. of America purchased the Bowie Bonds and notwithstanding the depreciation of performers royalty rights over the decade to 2007 received the full value of the Bond prior to the rights reverting to David.  It has been reported that David made the arrangement for the benefit of his family, wife Iman, their daughter, Alexandria, and his son from his first marriage, Duncan. He knew the Bowie Bonds were tax effective and that his estate would benefit from his music catalogue.

David created a Will in 2004 leaving the vast majority of his estate (reportedly worth over $100m) to his wife and two children – he asked that his body be cremated in Bali and his ashes be scattered “in accordance with the Buddhist rituals” – if cremation in Bali was “not practical,” that he instead be cremated locally and then have his ashes scattered on the Indonesian island.

It is likely that David established a series of trusts – this allowed the assets to pass to his heirs in a more tax-efficient manner.

Although I’m not saying that you should establish a similar series of trusts however you can be as mindful as David when planning for your loved ones futures. How about creating a Will, Power of Attorney, and an Advance care directive; Contact your Superannuation fund and check who you have named in your Binding Death Benefit Nomination, while you’re at it contact an insurance broker to discuss income protection and life insurance.

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