Lorenzen Wright played in the NBA for 13 years and earned $55 million. Shortly after his retirement, he was the victim of an unsolved murder in a suspected drug deal. He was survived by his ex-wife, Sherra Wright, and their 6 children. After his death, his ex-wife received $1 million in insurance proceeds in trust for the children. Within 10 months of receiving the proceeds, she was accused of having spent nearly all of them on housing, furniture, cars, and travel. She is now subject to probate court action to remove her as trustee.
1. It is never a good idea to have a former spouse serve as trustee for the children. A financially savvy third party is a much better choice. Newly divorced individuals should quickly revise their wills and trusts to remove the former spouse and to keep him/her away from assets for the children.
2. In some defense of Sherra Wright, purchasing real estate with trust assets is not spending them, it is re-allocating the type of investment.
3. I suspect that Mr. Wright is not the only former NBA player to have significant career earnings and to die with less than 2% of them remaining. Annual child support and alimony payments of $330,000 tend to rapidly diminish one’s net worth.