“Dynastic thunder within the blended family would actually have been much louder, if smart advisors hadn’t worked so hard to keep the assets under the three-time champion’s ultimate control.”
Muhammad Ali’s estate was relatively easy to settle, by celebrity heavyweight standards, provided the truce between his nine kids and his widow holds. The only item remaining is the venting of grievances and writing the checks, says TrustAdvisor’s recent article “Muhammad Ali Kids Fight Stepmom Over $80 Million Estate Plan.” However, grievances can get fierce, especially with second-generation boxers with grudges to resolve. Don’t count this match over until the last papers are signed.
Most of Ali’s kids—children of several different mothers—aren’t too friendly with their dad’s widow Yolanda or “Lonnie.” They claim that she tried to isolate Ali as his Parkinson’s disease progressed. Another sore point: the will reportedly gives Lonnie a double share of the estate.
Only the youngest of the kids, Asaad, is on Lonnie’s side. She adopted him as a baby, and they’ve always been close. The other kids resent her, especially since she’s going to get $12 million from the estate … compared to their $6 million apiece.
The kids dislike each other only a bit less, so chances are good that a unified front against stepmom Lonnie will fade. But Ali’s estate plan at least eliminates most of the classic disagreement that drives families apart permanently. All of the Champ’s kids get an equal share, so there’s no favorite and no special treatment.
Yolanda’s double share is much less than it would have been naturally. Ali’s attorneys helped him make some decisions when he was still in his peak earnings cycle.
Ali died in Arizona, where he and Lonnie had lived since 2005. It’s a community property state, so Lonnie could simply claw back half of the money Ali earned since he married her 30 years ago—like the $50 million Ali earned for selling his personal brand and a secondary $2 million rights package he cashed out three years before his death.
Lonnie was Ali’s third wife, and his lawyers insisted she sign a prenuptial contract. However, Ali refused to enforce it. She ended up with the house, the art collection and half of a $2 million bond portfolio. He kept the real estate, so the proceeds from the eventual sale of those assets go to the kids, not Lonnie. They also get their share of his holding companies.
Ali’s estate planning lawyers knew their stuff. As a result, their client’s kids don’t have the common concern that so many blended families face. That’s that dad’s last wife will squeeze them out of the family fortune.
Reference: TrustAdvisor (January 9, 2017) “Muhammad Ali Kids Fight Stepmom Over $80 Million Estate Plan”