Retirement can be a bigger drag on the assets than all the professional and romantic mistakes put together.
Larry King’s health had been fading for a few years before he died in the hospital last week. He was 87, with a history of heart trouble, a stroke, a bout with the coronavirus.
Toward the end he was also paying spousal support as part of a prolonged divorce negotiation. She was his seventh wife and outlasted all the others.
Now she’s in position to inherit all of the wealth he managed to earn and keep across his six-decade media career.
It’s a lot of money. People are talking in numbers above $50 million.
If he’d lived a safe, conventional life, he probably would have earned less and ultimately left less behind.
That’s the lesson we want to focus on here. As long as you and your clients are alive, there are no unhappy endings, only challenges and opportunities.
King wasn’t an early success. He was bankrupt before he was 30 and filed for debt protection again at 45, when a lot of really successful people start looking toward early retirement.
In the meantime, he faced down massive gambling debts, grand larceny charges for defrauding a business partner and endless professional setbacks.
By the time he really got his act together, he had already survived five divorces to four women as well as one youthful annulment.
Under normal circumstances, all those broken marriages add up to depleted bank accounts as households multiply and income keeps getting divided.
But he kept working. And while each bankruptcy reset his official net worth to zero, every contract negotiation kept rising the income bar.
The assets recovered faster each time. And when the divorces and bankruptcies finally stopped, he kept working well beyond the normal retirement age.
That extended working life gave him a chance to transition from the old work-for-hire radio industry to the new world of highly compensated multimedia celebrity.
Retiring in the 1980s or even the 1990s would have given him at best a brief taste of that world and those multi-million-dollar contracts.
Maybe he would have spent the last few decades relaxing and pursuing outside interests. But they wouldn’t have made him rich and we wouldn’t be talking about him today.
What happens next
Since he died before finalizing the divorce, final wife Shawn probably gets everything not otherwise assigned in his will.
That’s a lucky break for her. Previously she was looking at a minimal lump sum payment and $300,000 in annual support.
She argued that she needed $1 million a year just to break even. Now it looks like she inherits after all.
There’s also a chance that his estate plan is unsettled. While he had five kids from various marriages, two of them died last year, when he was sick and negotiating the divorce.
If they’re still named in the will, the contingencies needed to be spelled out to avoid them and their kids getting passed over.
Several of his previous ex-wives are already dead as well. While Social Security survivorship is small potatoes at this level, the fact that so many of Larry’s wives predeceased him simplify that situation somewhat.
There seems to have been a de facto prenuptial arrangement in any event. Larry learned from his previous rough patches and listened to professionals before making moves later in life.
Real financial advice is worth the cost. He knew that. Odds are very good that his advisors did great work before the wedding and kept doing the best they could through his last years.
Shawn openly lists $7 million in assets in her own name, including the house in Utah. That’s normally a great start to a divorce settlement split.
She wanted more because Larry was still working. Just last year he signed a trial podcast deal worth at least $5 million.
That’s the only irony. He never scaled back like conventional retirees. As long as outside cash was flowing in, overhead ensured that money kept flowing out.
Now he can’t earn anything on new interviews. His media employers own most of his back catalog so if anyone monetizes his posterity, it won’t be the family.
What Shawn does with his posthumous reputation is up to her. Let’s hope she does the right thing.