Short careers, long liabilities: estate planning for professional athletes

For professional athletes, the journey to sporting success requires dedication, sacrifice, and years of hard work. Yet while most sports professionals focus intensely on their performance and career progression, many overlook a crucial aspect of long-term financial security: comprehensive estate planning.

Athletes face a distinct set of challenges that make early and sophisticated planning essential. Careers are often short, sometimes lasting only a few years, yet the wealth accumulated during this period must sustain them and their family for decades. Income streams can be substantial but irregular, assets may be held across multiple jurisdictions, and the risk of sudden, career ending injury is ever-present. Layered onto this are the complexities of image rights, sponsorship arrangements, and bespoke corporate or trust structures. Taken together, these factors mean that a “standard” estate plan is rarely sufficient; instead, sports professionals require tailored, dynamic strategies that evolve alongside their careers.

Planning issues

There are distinctive planning issues that arise when advising professional athletes. Many are relatively young, often with young families, and may not yet have engaged with fundamental estate planning questions, particularly what should happen in the event of incapacity or premature death. From the outset of a professional career, advisers should be encouraging athletes to address the basics such as putting in place a valid will, appointing guardians for minor children and executing lasting powers of attorney for both property and financial affairs, and health and welfare.

Trusts frequently play a central role at this early stage. They can provide a flexible and protective framework through which assets are held, managed, and ultimately transferred to future generations. This is particularly valuable where beneficiaries are minors or where there is a desire to control the timing and circumstances of distributions. Discretionary trusts, for example, can allow trustees to respond to changing family circumstances, while also offering a degree of protection against external risks such as relationship breakdowns or creditor claims.

As an athlete’s career develops, their planning needs will inevitably become more complex. Consideration must be given to tax efficiency, including inheritance tax (IHT) mitigation, as well as to the structuring of sponsorship income and commercial arrangements. Sponsorship contracts may involve advance payments, performance-related bonuses, and long-term endorsement deals, all of which can have implications for both lifetime tax exposure and the value of the estate on death. Where corporate entities are used to receive or manage such income, the interaction between personal and corporate assets becomes a key area of focus.

Compressed earning periods

One of the defining features of a professional sporting career is the compressed earning period. Many athletes will generate the bulk of their lifetime wealth within a relatively short window which is often between 10 and 15 years. Despite this, there can be a tendency to defer long-term planning, either through lack of awareness or a focus on immediate performance and lifestyle.

This delay can be problematic. Rapid wealth accumulation can lead to substantial estates forming in a short period, potentially creating significant IHT exposure if not managed proactively. Early planning allows for the implementation of structures that can grow with the athlete’s wealth, rather than requiring more complex and potentially costly restructuring at a later stage.

During this high-earning phase, wealth is often deployed into a combination of investments, property portfolios, and business ventures, including vehicles established to manage sponsorship and intellectual property income. Unlike more traditional career paths, pension provision may be less central, particularly where athletes prioritise liquidity or alternative investments. As such, careful thought must be given to how these assets are held.

For example, where investment portfolios are held within corporate structures, consideration can be given at the outset to different classes of shares. This can facilitate future succession planning by enabling value to be transferred to family members in a controlled and tax-efficient manner. Similarly, the use of family investment companies or trusts can allow for the gradual shifting of wealth out of the athlete’s estate while retaining an appropriate level of control.

Regular reviews are critical. Structures that are appropriate at the start of a career may become less suitable as asset values increase, family circumstances change, or tax legislation evolves. Periodic reassessment ensures that planning remains aligned with both the athlete’s objectives and the prevailing legal landscape.

Image rights

A particularly nuanced aspect of estate planning for athletes is the treatment of image rights. A sportsperson’s name, likeness, and personal brand can represent a significant source of income, both during their career and after retirement or even death.

Image rights are often exploited through dedicated corporate entities, which enter into endorsement and licensing agreements with sponsors. From an estate planning perspective, this raises a number of questions. Who ultimately owns the image rights? How are they valued? And how should they be transferred or preserved for the benefit of future generations?

Where image rights are held within a company, the shares in that company will typically form part of the athlete’s estate. However, the underlying value may be closely linked to the individual’s ongoing reputation and public profile, making valuation inherently uncertain. There may also be contractual provisions governing the use of the athlete’s image after death, which need to be carefully reviewed.

In some cases, it may be appropriate to separate ownership from control, for example by transferring shares into trust while retaining certain rights or influence during the athlete’s lifetime. This can facilitate succession planning while ensuring that the commercial exploitation of the image rights continues to be managed effectively.

Advisers should also be mindful of the international dimension of image rights, particularly where endorsement deals span multiple jurisdictions. Differences in tax treatment and legal recognition of such rights can materially affect the overall planning strategy.

Cross-border lifestyles

As referred to above, professional athletes frequently lead international lifestyles, whether through playing contracts abroad, training commitments, or global sponsorship obligations. This mobility introduces an additional layer of complexity to estate planning, particularly in relation to domicile and tax residence.

An athlete may be tax resident in one jurisdiction, domiciled in another, and hold assets across several more. Each of these factors can influence the scope of IHT or equivalent taxes, as well as the applicable succession laws. For example, forced heirship regimes in certain civil law jurisdictions may restrict the individual’s freedom to dispose of their estate as they wish.

Establishing and maintaining clarity around domicile status is therefore essential. Similarly, careful tracking of residence status under the statutory residence test is required to manage exposure to UK taxes. 

Where assets are located overseas, such as property, investments, or business interests, then local succession laws and tax regimes must be considered alongside UK planning. In some cases, it may be appropriate to have separate Wills dealing with assets in different jurisdictions, although this must be approached with caution to avoid inadvertent revocation.

Cross-border planning often necessitates collaboration between advisers in multiple jurisdictions to ensure that the overall strategy is coherent and effective. Without such coordination, there is a risk of double taxation, conflicting legal provisions, or unintended gaps in planning.

Philanthropy

Philanthropy is a common and often highly visible aspect of many athletes’ financial lives. Whether through personal charitable foundations or support for existing organisations, sports professionals frequently seek to give back to communities or causes that are meaningful to them.

There are, of course, deeply personal motivations behind such giving ranging from community ties to personal experiences. However, philanthropy can also form an integral part of an overall estate planning strategy.

In the UK, charitable giving can provide significant tax advantages. Lifetime gifts to qualifying charities are generally exempt from IHT, and legacies left to a qualifying charity on death are also exempt. Moreover, where at least 10% of the net estate is left to charity, a reduced rate of IHT may apply to the remainder of the estate. These incentives can be particularly attractive for high-net-worth individuals, including successful athletes who not only want to mitigate tax but leave a legacy for different purposes.

Many professional sports clubs operate their own charitable foundations, delivering community programmes and initiatives. Athletes may choose to support these directly or become more closely involved as ambassadors or trustees. Others establish their own charitable trusts or foundations which can provide a structured and enduring vehicle for philanthropic activity.

From a planning perspective, it is important to ensure that such structures are set up and governed appropriately, with clear objectives and robust administrative arrangements. Consideration should also be given to how philanthropic commitments will be maintained after the athlete’s death. 

Conclusion

Estate planning for sports professionals is rarely straightforward. The combination of high but short-lived earnings, complex income streams, international mobility, and valuable personal brands creates a landscape that demands careful, proactive management.

Early engagement is key. By putting fundamental structures in place at the start of a career and building on them as circumstances evolve, athletes can ensure that their wealth is protected, their families are provided for, and their long-term objectives - whether personal, commercial, or philanthropic - are achieved.

For advisers, the challenge lies in understanding not only the technical aspects of estate planning, but also the unique pressures and opportunities that define a sporting career. With the right approach, estate planning can move from being an afterthought to a central pillar of an athlete’s overall financial strategy during their lifetimes and on death.