Having counseled professional, Olympic, and other blue-chip current and former athletes, I have seen patterns develop in their lifestyles and similar legal strategies. Sports careers are short, and due to the small capitalization timeframe, changes to their tax liabilities and financial expenditures raise a number of legal concerns for these talented individuals.

Athletes (as well as other professionals working in sports) should talk with their attorney about a holistic approach to their legal strategy, working with their financial advisor(s), business managers, family, and agent. The overall goal should be to maximize their on-field success to fund their off-field success. Typically, athletes should discuss the following five areas with their personal attorney to determine what steps need to be taken with each category:

Estate Planning. Why is estate planning first on this list? For starters, a trust may be a great way for an sports professional to manage finances with minimal effort and a way to protect their current assets for their post-sports life. When and if an athlete hits free agency, signs an endorsement deal, or develops a personal brand, a trust may help guide the athlete and his/her finances so they can upgrade (or downgrade) their lifestyle seamlessly.

Corporate Entity. For all but a select few, playing careers end sooner than expected. If a sports career lasts one season or one decade, an athlete will likely have 30 or more years to fill after they walk off the field for the last time. In retirement, there is always an adjustment period and bad decisions from the past can come back to haunt an athlete when their game is over. Owning and managing a private corporate entity can protect some assets while keeping the assets under control and provides tax advantages for high-net-worth individuals.

Additionally, corporate entities can provide offseason and post-career business. Some athletes have their corporate entity run the athlete’s camps/clinics, manage intellectual property rights, and oversee outside business interests.

Family Status. Athletes are generally young and having a family and/or kids are decisions that are important decisions that will impact an athlete’s personal and financial well-being. Prenuptial or postnuptial agreements may be important for some athletes for a variety of reasons, and understanding what the sports client is planning in his or her personal life will often drive many of the decisions of what is needed for their legal strategy.

Intellectual Property. The intellectual property rights asset of a sports personality is one-part creativity and one-part protection. First, all athletes should discuss securing trademarks and copyrighting their creative content. Protecting some material can be beneficial for a sports personality financially, emotionally, socially, and can even benefit a cause or foundation the client holds dear.

Even more than trademarks and copyrights, a specific discussion needs to take place regarding the use of the client’s name, image, and likeness. Many people and businesses will try to capitalize on a picture they once took with an athlete or a time an athlete came into a business or brag they know the athlete. A cohesive legal strategy will help protect current sponsorship and endorsement deals, and protect and control the athlete’s public image, that can be used to the athlete’s overall benefit.  

Due Diligence Investigations. Sports personalities are often approached for business investments. While some of these opportunities can be wonderful, others are risky. Examples of athletes who have been taken advantage of on a bad business investment are numerous.  Talking with a lawyer who understands the lifestyle, finances, interests, and business can limit the risk and keep sports clients from making bad deals.

Sports professionals should talk with experienced professionals with an understanding of their lifestyle, career, ambitions, and the flexibility to deal with changes in a career. This includes their lawyer, business manager, accountant, financial advisor, insurance broker, and anyone else that will be handling important parts of their/their family’s life.