Jimmy Buffett died on September 1, 2023, at age 76 after a diagnosis of Merkel cell carcinoma (skin cancer) four years earlier. He was a renowned singer-songwriter, film producer, businessman, novelist, and philanthropist.
Buffett released his first album, Down to Earth, in 1970. By 2023, his net worth was officially $1 billion,[1] including a $180 million stake in his company, Margaritaville Holdings LLC, which opened in 1985 and now brings in $1 to $2 billion annually.
Who Stands to Inherit Buffett's Estate?
Buffett had an early three-year marriage to Margie Washichek, which ended in 1972, and married Jane Slagsvol in 1977. He and Jane had three children: Savannah, Sarah, and Cameron. The children have all pursued careers in the music, film, and entertainment industries.
According to the New York Times, most of Buffett's money and property, including intellectual property and music rights, are held in a trust. [2] His wife, Jane, is the personal representative distributing the estate according to his will, with help from his business partner and Margaritaville Holdings LLC CEO, John L. Cohlan, if necessary. Because the trust provides the family with privacy, there are no specifics regarding which belongings will be passed to his wife, three children, two grandchildren, and two siblings. His estate is estimated to include the following[3]:
1. Music royalties of $20 million annually
2. A collection of houses and cars
3. 150 Margaritaville restaurants, casinos, cruises, and related business holdings
4. A yacht and several planes
5. Stock market investments, including shares in Berkshire Hathaway
6. Watches and memorabilia
Buffett was receiving close to $200 million annually for his shares in Margaritaville Holdings LLC, and issues with his health and medical expenses did not affect his business or family legacy. He was still growing his wealth when he died.
Other Estate Planning Strategies Buffett Could Have Included Beyond His Will
Buffett cofounded the Save the Manatee Club in 1981 with former Florida governor Bob Graham, supporting rescue, rehabilitation, research, and education efforts in the Caribbean, South America, and West Africa. During his lifetime, Buffett gave away and helped raise millions of dollars for charities. For every concert ticket he sold, one dollar went to a charitable cause he believed in. [4]
Charitable Remainder Trusts
Given his charitable actions during his lifetime, Jimmy Buffett may have established a charitable remainder trust (CRT) to incorporate charitable giving into his estate plan. This type of trust could secure his family's future by providing a consistent income source to his beneficiaries while ultimately honoring his charitable nature by leaving the remainder to the charity of his choice.
Family Limited Partnerships or Family Limited Liability Company
Buffett likely considered his restaurants to be much more than commercial enterprises, and business continuity may have been preserved by creating a family limited partnership (FLP) or family limited liability company (LLC). Using one of these entities could have enabled him to pursue different strategies to retain control of his business shares while gradually transferring ownership to his wife and children. He could also have taken advantage of the annual gift tax exclusion by making tax-free gifts of the limited partnership interests, thereby mitigating potential future estate tax implications.
Grantor Retained Annuity Trusts
A grantor retained annuity trust (GRAT) may have been another trust structure that Buffett considered to pass down his business interests while retaining certain financial benefits during his lifetime. A GRAT is an irrevocable trust that would have allowed him to transfer his business interests or other assets with the potential for significant appreciation in value to the trust while still retaining an income stream for himself via annuity payments for a specified term. At the expiration of the term, his beneficiaries would receive any trust assets, with any excess appreciation above the § 7520 rate transferred free of estate and gift taxes.
Family Trusts
After years of using and enjoying the property he owned, Buffett could also have taken steps to ensure the smooth transfer of assets, such as his airplanes, to future generations for their own use and enjoyment by establishing a family trust. A family trust would have allowed him to designate how the planes should be used, maintained, and cared for after his death.
In a well-designed estate plan, the things someone owns, such as Buffett's planes, money, and other significant property, would be transferred outside probate, thereby maintaining the family's privacy. Additionally, the beneficiaries would not have to wait to wrap up lengthy or costly court proceedings before inheriting the assets Buffett intended for them.
Long-Term Care Planning and Advance Directives
Buffett had plenty of funds to pay for his long-term care needs privately. Still, he may have set aside specific financial resources to pay for care in advance if he had consulted a professional advisor or estate planning attorney earlier in his life. Based on comments made by his family in his final days, he may have also prepared advance directives so everyone understood his wishes for care and treatment at the end of his life. Consequently, he has made a peaceful exit from a terminal illness on his own terms.
While Buffett's life may be over, he leaves behind a substantial legacy. Keep an eye out for the posthumous release[5] on November 3, 2023, of the album Equal Strain on All Parts, featuring guest contributions from Paul McCartney, Emmylou Harris, Angelique Kidjo, and the Preservation Hall Jazz Band.
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Footnotes
[1] Jessica Tucker, Here's How Much Jimmy Buffett's Estate Is Worth (and Who Stands to Inherit It), The Things (September 8, 2023), https://www.thethings.com/how-much-was-jimmy-buffett-worth/#.
[2] Julia Jacobs, Jimmy Buffett's Will Appoints His Wife as Executor of His Estate,N.Y. Times (October 13, 2023), https://www.nytimes.com/2023/10/13/arts/music/jimmy-buffett-will.html.
[3] Gabbi Shaw & Jordan Parker Erb, Jimmy Buffett Became a Millionaire after 5 Decades in the Music Industry. Here's How the Late Singer Made and Spent His Fortune, Insider (September 2, 2023), https://www.insider.com/jimmy-buffett-billionaire-makes-and-spends-his-money-2023-4.
[4] Id.
[5] Megan LaPierre, Jimmy Buffett's Estate Announces Posthumous Album Equal Strain on All Parts, Shares Three Songs, Exclaim (September 8, 2023), https://exclaim.ca/music/article/jimmy_buffetts_estate_announces_posthumous_album_equal_strain_on_all_parts_shares_three_songs.
