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How Kirk Douglas’s Estate Shows the Value of Strategic Trust Planning

March 11, 2020
David Parker, Esq.
What doesn't Medicare cover.
David Parker, White Plains and New City NY Estate Planning Attorney
David Parker, Esq.
David Parker is an attorney who specializes in Estate Planning and Elder Law and has been practicing law for 30 years. Be it Wills, Trusts, Powers of Attorney, Health Care Proxies, or Medicaid Planning, David provides comprehensive and caring counsel for seniors and their families. A large portion of David’s practice is asset protection strategies so that families do not lose their hard earned savings to nursing home care costs. He also handles probate administration for the settlement of estates.
Old Hollywood didn’t pay stars well by modern standards, but Kirk had the wisdom to own his most iconic films and pour the profit into property. Soon philanthropy will force tough choices. The death of any giant produces shockwaves. Where Kirk Douglas is concerned, those ripples reveal how much the entertainment landscape changed in his lifetime and how much the numbers have grown.

In a recent article, Wealth Advisor sheds light on the impressive legacy left by Hollywood legend Kirk Douglas. While Douglas worked actively in Hollywood for four decades, he slowed down his career after the early 1980s, choosing to focus on family and philanthropy. Despite years of semi-retirement, Douglas’s wealth remained substantial, thanks to his early and proactive approach to managing his fortune.

Douglas’s Approach to Wealth: Profit Sharing and Ownership

From early on, Kirk Douglas had a vision for his career and finances that was ahead of its time. Not only was he one of the first actors to negotiate profit participation in his films, but he also established his own production company, ensuring ownership of his projects. For example, on his iconic film Spartacus, rather than drawing a traditional salary, Douglas took 60% of the profit, which ultimately brought him significant financial gains.

This strategy allowed Douglas to retain rights to his films and ensure long-term value from his work. His decision to structure earnings this way secured him tens of millions over the years, setting the foundation for what became a highly structured estate plan.

Family Trusts and Asset Protection

Douglas and his wife Anne structured their wealth through various tiers of trusts and holding companies. By placing assets into a family trust, they ensured that wealth would continue to benefit their family and the causes they cared about while minimizing estate tax obligations. For example, one of their holdings includes a half-ownership stake in Marina Del Rey’s Shores apartment complex—a high-value asset that has appreciated considerably since it was acquired.

As the only current shareholder, Anne Douglas is able to control how assets are used and managed, with a clear plan for successor trustees to handle these investments in the future. This trust structure not only secures family interests but also protects valuable assets from potential estate tax, allowing wealth to pass to future generations.

The Role of Philanthropy and Legacy Planning

Douglas’s legacy goes far beyond family inheritance. Over the years, the Douglases have committed tens of millions to hospitals, schools, and cultural institutions. By structuring their estate with philanthropic provisions in mind, they set a powerful example of how trusts can make a long-term impact. Their approach ensures that Douglas’s wealth continues to support meaningful causes without triggering estate tax concerns, demonstrating how comprehensive trust planning can provide for both family and charity.

Key Takeaways for Strategic Trust Planning

  1. Profit Participation and Ownership – Douglas’s decision to negotiate for a stake in his films laid a solid foundation for his wealth. For high-net-worth individuals, considering ownership or profit-sharing agreements can create substantial, long-term value.
  2. Family Trusts for Wealth Transfer – By structuring assets within a family trust, the Douglases were able to bypass probate, avoid estate taxes, and protect assets from future claims. In states like California and Florida, where estate taxes can be high, trusts are an essential tool for securing a legacy.
  3. Multi-Generational Wealth Planning – Trusts allow for assets to be managed over generations, so families can protect investments like real estate, art collections, or business interests for decades to come. Kirk and Anne Douglas’s extensive trust holdings ensure that assets will be carefully managed and can continue to grow in value.
  4. Philanthropic Legacy – Including charitable giving in estate plans can provide tax advantages and create a lasting legacy. The Douglases’ example underscores how trust planning can benefit family and community alike, ensuring that resources make a difference long after they are gone.

Kirk Douglas’s estate serves as a model of how thoughtful, long-term trust planning can secure wealth, support loved ones, and build a meaningful legacy that continues to impact the world.

Reference:  Wealth Advisor (Feb. 4, 2020) “Kirk Douglas Lived Well, Died Rich And May Trigger $200M Los Angeles Range War”

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