Matthew Perry made millions in Friends remains. What happens now?

Matthew Perry, the beloved actor best known for his role as the sarcastic, wisecracking Chandler Bing on the sitcom “Friends,” died Saturday at age 54.

He has left behind a legion of fans and a large estate.

A significant part of the actor’s wealth came from his most famous role. The revenue is reportedly $20 million a year from syndication and streaming revenue.

A spokesman for Warner Bros., which owns the show’s distribution rights, declined to confirm or comment on outstanding payments. CNBC was unable to reach Perry’s representatives for comment.

When an actor dies, the outstanding payments are considered personal property of the actor. Now, this residual cash flow stream is probably owned by his property.

Charlie Douglas, a certified financial planner and president of HH Legacy Investments in Atlanta, said there are three possibilities for Perry’s “friends” to inherit the remains based on California law, where he lived.

The Screen Actors Guild-American Federation of Television and Radio Artists has contracts in which its members can list beneficiaries for residual payments upon death. As an option, Perry could have named a person or persons here. (This is the same practice as naming a beneficiary for common types of accounts such as 401(k) or individual retirement accounts.)

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As another option, Perry could have named a trust — and no individual — as the beneficiary of his outstanding payments, Douglas said. The remaining balances will go to the trust and the trust will have conditions as to who received them.

Unlike a will, which is a matter of public record in probate, trusts are private – in which case the public may never know who inherits Perry’s “friend” income.

However, there is a third option: Perry did not name a beneficiary. In that case, state law will determine his estate plan.

“It is quite possible that having no spouse or children, he wrote nothing at all,” said Douglas.

All states have a framework that dictates how your cash and assets should be distributed when you die. These are known as intestacy laws, and they vary from state to state.

In most states, there is a specific hierarchy for inheritance, in order of who receives the assets: spouse first, then children, grandchildren, parents and finally, siblings, Douglas said.

Perry never married or had children. She is survived by her parents (who divorced when Perry was less than a year old and have since remarried) and five half-siblings.

According to Tasha Dickinson, trust and estate partner at DayPitney, in California, her parents would be potential recipients of royalties from acting roles as well as other parts of her estate, including her 2022 memoir.

If that were the case, Douglas said, her parents could choose to do a “qualified waiver” to relinquish their rights to the balance, in which case the money would go to the half-siblings.

“It’s not at all unheard of for rich parents to make a disclaimer,” he said. For example, Perry’s stepfather is Keith Morrison, an award-winning broadcast journalist and longtime correspondent for NBC’s “Dateline.”

Otherwise, Perry’s assets will be distributed based on the probate court system.

“Probate is particularly frowned upon in California because it is expensive, time-consuming and an invasion of privacy (since) all court proceedings are public records,” said David Oh, head of tax and estate planning at Arta Finance.

For celebrities like Perry, in particular, “not having an estate plan creates confusion, attracts unwanted media attention and can cause family conflicts,” he added.

Perry may also have chosen to leave his estate outside of his family.

He had close relationships personally and professionally and supported several philanthropic interests, “and it wouldn’t be surprising to see some of his wealth go to them,” Oh said.

The actor, who publicly struggled with addiction for years, once opened a comfort retreat in his Malibu mansion and was working to create a foundation for addiction problems.

On November 3, the Matthew Perry Foundation was established in his name as a donor-advised fund. The charity is sponsored and maintained by the National Philanthropic Trust.

Perry said during an interview in 2022, “When I die, I know people will talk about ‘Friends,’ ‘Friends,’ ‘Friends.’ An actor… but when I die. , as for my so-called achievements, it would be nice if ‘friends’ were listed behind the things I tried to help other people with. I know that won’t happen, but that’s nice. Will be.”

Charitably inclined individuals can also use their donations to avoid or reduce estate tax. Charitable contributions are not subject to estate tax, Douglas said.

For 2023, individuals can leave up to $12.92 million to heirs without triggering a federal estate tax bill. Plus, the federal estate tax rate is 40%, and even though California has no estate tax or inheritance tax, that could mean a big bill for someone like Perry, according to Oh of Arta Finance.

Sometimes, philanthropists donate any assets above the estate tax threshold to charity and leave the rest to heirs, avoiding the estate tax altogether, Douglas said. .

Often, such high-net-worth taxpayers work with advisors on these types of strategies.

“Estate planning isn’t fun—many people don’t enjoy facing their own death—but the more money and assets, whether they’re real or intellectual property or copyrights or royalties, the more important all the proverbial ducks in a row,” said David Johnston, a certified financial planner and managing partner of Amwell Ridge Wealth Management.

Disclosure: NBCUniversal is the parent company of NBC’s “Dateline” and CNBC.