Why Student Athletes Need Estate Plans Too (And What Parents Must Know)
Since 2021, college athletes have been allowed to profit from their name, image, and likeness. Known as NIL income, these sponsorships, endorsements, and social media deals can turn a teenager’s reputation into a small business overnight. In North Carolina, this new reality presents unique risks, as every school sets its own compliance rules and state law governs how contracts, taxes, and inheritances are handled.
When a child turns 18, parents lose their automatic right to make decisions about medical care or finances. That change collides with the reality that a student athlete’s NIL deals may already be worth thousands and, in some cases millions of dollars.
Estate planning for student athletes in North Carolina is about protecting the athlete. If they are injured or become unable to make decisions, estate planning ensures contracts and obligations do not unravel. If a medical crisis strikes, it prevents delays that can harm both health and finances. If the unthinkable happens and the athlete dies, it keeps NIL rights, digital accounts, and sponsorship income from being tied up in court or disputed by others.
Even while the athlete is healthy and thriving, estate planning matters. It shields their earnings from unnecessary losses, can reduce taxes, protects them if creditors or disputes arise, and ensures obligations are managed if an injury or setback prevents them from performing.
In short, estate planning for student athletes in NC provides a safety net that guards both their financial future and their well-being while they are still in school.
Estate Planning for Under-18 Athletes in North Carolina
High school athletes in North Carolina are now permitted to take part in NIL deals, but the North Carolina High School Athletic Association continues to update and change the rules.
Currently in 2025, a minor cannot sign binding contracts on their own, which means a parent or guardian must co-sign any NIL agreement. The state high school athletics association may need to provide the final approval. Parents remain responsible for overseeing the financial side of the arrangement.
Families who want to protect NIL money for high school athletes often use custodial accounts under the Uniform Transfers to Minors Act. These allow parents to manage the funds until the child reaches legal age.
For larger earnings, some families create a trust with the parent or another trusted adult serving as trustee.
Others go a step further and set up a limited liability company where the parent is the manager. That structure creates liability protection and a professional face for the athlete’s brand even before college begins.
The risk for families comes when they sign long-term or restrictive contracts without legal review. A poorly drafted deal can threaten college eligibility under NCAA or NCHSAA rules.
Taxes can also catch families off guard, because all forms of NIL income are taxable even if compensation for certain sponsorship deals comes in the form of free equipment or travel perks.
Early planning can keep opportunities open while protecting the athlete’s eligibility and future finances.
Estate Planning in NC When Your Child Athlete Turns 18
Eighteen is a legal milestone in North Carolina. Once an athlete reaches that age, parents no longer have automatic authority over finances, medical treatment, or contracts. Federal privacy laws reinforce this boundary. FERPA limits a parent’s access to academic records, and HIPAA restricts medical record access.
That means if a student athlete is hospitalized after a game or becomes incapacitated, parents may not be able to step in unless the right legal documents are in place.
The most important step at this age is creating a durable financial power of attorney under North Carolina law. This allows a trusted adult to manage bank accounts, NIL contracts, and sponsorship payments if the athlete cannot.
A health care power of attorney combined with a HIPAA release ensures that someone can make medical decisions and receive information in an emergency.
A will or trust directs who inherits NIL rights, contracts, and digital assets if something tragic occurs.
Another critical tool is a designation under North Carolina’s digital asset law, the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). This gives legal authority to manage or close social media and content platforms like TikTok, Instagram, or YouTube, where NIL money is earned.
Without these documents, families often face court proceedings just to act on behalf of their child, which wastes precious time and money when quick decisions are needed.
Estate Planning for a Student Athlete’s NIL Income and Contracts in NC
NIL rights are intellectual property that can keep generating income even if an athlete is injured, incapacitated, or deceased. They need to be included in estate plans just like bank accounts or real estate.
A will or a revocable living trust can specify who controls those rights and how ongoing income is managed. A trust keeps NIL assets out of probate, avoiding delays and keeping contracts running.
Many athletes also form a business entity such as an LLC or an S-Corporation to hold NIL contracts. This provides clear benefits. The entity protects personal assets from lawsuits or contract disputes. It also allows broader tax deductions for legitimate business expenses, such as travel, gear, content production tools, part of rent or utilities, and professional services.
An S-Corp can reduce self-employment taxes by splitting income between salary and distributions. The entity also creates continuity, because the business can keep operating under a manager or trustee even if the athlete is incapacitated. It also signals professionalism, which makes brands more comfortable signing contracts.
When NIL contracts remain only in the athlete’s personal name, the risks multiply. If the athlete dies, the contracts may freeze in probate for months. Sponsors may cancel or sue if obligations are not met. Creditors can also make claims against personal income more easily. Using the right estate planning tools ensures NIL rights remain protected as valuable property.
Best Practices for North Carolina Parents of Athletes
Start planning before the athlete turns 18. Parents should make sure they have their own estate planning finalized and in place. For athletes who expect significant NIL earnings, a trust adds an extra layer of protection by avoiding probate and ensuring income continues without interruption.
Because NIL deals change quickly, the plan should be reviewed every year.
Naming clear agents, trustees, and successors avoids conflict later and ensures everyone knows who is responsible if the unexpected happens.
School and NCAA Policy Overlap Considerations for Student Athletes in NC
Each North Carolina school sets its own NIL compliance rules on reporting deals, logo use, and sponsor conflicts, which operate alongside NCAA requirements and federal advertising laws.
This overlap creates real risks. A contract may be valid under state law yet violate school policy, putting scholarships and eligibility at risk.
Estate planning cannot change these rules, but it ensures parents, agents, and attorneys coordinate so contracts meet both legal and school standards. That balance helps prevent a seemingly valid deal from endangering an athlete’s future on the field.
Tax and Financial Realities for NIL Income in North Carolina
Most NIL income is treated as self-employment income. Athletes usually receive a 1099 form, but even if no form arrives, the money is still taxable. They must report it on Schedule C, pay both income and self-employment tax, and make quarterly estimated payments unless the income is structured differently.
An LLC or S-Corporation can make a major difference. An S-Corporation allows the athlete to pay themselves a reasonable salary and then take the remaining profit as a distribution, which lowers the self-employment tax burden.
Both LLCs and S-Corporations also give athletes a structure for deducting business expenses such as travel, training, and equipment.
Student athletes in North Carolina also need to be aware of multi-state tax obligations. If they earn NIL income while traveling or appearances in other states, they may owe taxes in those states as well.
Failing to report the income correctly or skipping quarterly estimates often leads to penalties, audits, and delayed refunds. Estate planning that coordinates with tax planning is essential to avoid these unnecessary costs.
Common Challenges with Estate Planning for Student Athletes in NC
In North Carolina, the biggest challenge is a lack of awareness. Families often think estate planning is only for older adults, so when an athlete turns 18 they are unprepared, and parents lose legal authority.
NIL contracts add risk because they are binding and can spark disputes if the athlete is injured or dies. Probate can last up to eighteen months, freezing sponsorship income and adding costs.
Depending only on a will leaves NIL rights stuck in probate, and overlooking digital assets like Instagram or YouTube accounts creates further gaps. Lack of coordination among advisors and poor tax planning also cause problems, from conflicting instructions to IRS penalties.
Frequently Asked Questions About Estate Planning for Student Athletes in North Carolina
Can parents automatically manage NIL contracts after a child turns 18 in NC?
No. At 18, the athlete is legally an adult. Parents cannot automatically handle contracts, taxes, or health decisions. Estate planning is what allows trusted adults to step in when necessary.
Do student athletes in North Carolina need estate planning at 18?
Yes. Estate planning ensures someone can step in if the athlete is injured, incapacitated, or dies unexpectedly. It protects both health decisions and valuable NIL contracts.
Why is estate planning important for athletes with NIL income?
NIL deals can be worth thousands or even millions, but they are legally binding contracts. Estate planning protects the athlete if they cannot fulfill obligations due to injury or incapacity and prevents sponsorship income from being frozen in court if the athlete dies.
Why should a healthy college athlete still think about estate planning?
Estate planning also helps while the athlete is thriving by reducing taxes, protecting income from creditors, and keeping contracts running smoothly.
How does estate planning protect an athlete’s NIL brand?
An athlete’s name, image, and likeness are intellectual property. Estate planning ensures these rights are properly transferred, protected from disputes, and not left vulnerable to creditors or court delays.
What risks do athletes face if they get injured without an estate plan?
If an athlete cannot make decisions, bills may go unpaid, and NIL contracts may be breached. Estate planning ensures someone can step in immediately to manage obligations and keep their career and finances intact.
Can NIL income be inherited if a student athlete dies?
Yes. NIL contracts and ongoing digital revenue streams can pass to heirs, but only if they are properly addressed in a will or trust. Without a plan, those rights can get tied up in North Carolina probate court.
Do North Carolina schools have rules about NIL planning?
Yes. Each school sets its own policies on reporting, sponsor conflicts, and logo use. Estate planning ensures contracts align with both school rules and state law, reducing the risk of lost eligibility.
What happens to digital NIL accounts if an athlete has no estate plan?
Without legal authority, families may be locked out of social media accounts that generate NIL revenue. Estate planning includes designations that allow someone to access and manage them.
What if an athlete earns NIL money in more than one state?
They may owe taxes in each state where income is earned. Estate planning and tax planning together prevent or reduce multi-state tax problems and reduce penalties for underpayment.
How does estate planning protect against creditors?
NIL earnings can be a target for creditors or lawsuits. Estate planning strategies like trusts or business entities protect income and ensure it is not easily seized.
Final Thoughts
As soon as NIL money starts flowing, student athletes in North Carolina become business owners with valuable intellectual property. Estate planning is the safety net that protects both their health decisions and their financial contracts.
Families who prepare early can avoid court delays, tax penalties, and contract disputes. The right plan keeps NIL income moving, protects the athlete’s brand, and provides peace of mind in emergencies.
Schedule a free initial 15-minute consultation to discuss how to protect your child’s future both on and off the field.
