One advantage Carter-Williams had in forming the trust that is not available to all young athletes is lucrative endorsement deals. Johnson said for most young NHL players, in contrast to a multimillion dollar contract, they are shuttling between the AHL and NHL and their income fluctuates as a result. "They need to get through the entry-level banking and saving," he said.
Butowsky said locking up the entire value of a contract is not realistic for most young pros, even those with endorsement deals, which often include many contingencies that make them worth much less than meets the eye.
Lifestyle choices are more important. "These guys don't need a lot of money to live on. During the season their meals are paid for, and they need to get an apartment, so if you are spending $5,000 a month you can probably do it" with limited endorsements, Butowsky said. "Everyone needs to spend less money, including my wife," he said.
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Spencer said athletes should save at least half their pay and treat the other half like any other budget, with 25 percent devoted to housing. (In the case of the NFL, the problem for athletes is acute, since they receive 17 game checks each season, leaving them technically without income for much of the year.)
"Athletes have to have a budget or allowance for every paycheck, and the rest needs to be put aside," Spencer said. "If they can't keep themselves from spending, then maybe you have to consider a more extreme plan."
Johnson's group has worked with players who structure trusts, though he said instead of a term trust, many athletes use revocable trusts, in which there is a trustee who oversees the assets and must approve player withdrawals. "In the right situations, trusts work," he said. "They protect the athletes and create a barrier of entry for solicitations."
Life after work
Spencer said it would be a mistake to think of pro athletes as being inherently bad with money. In fact, he has worked with athletes who made successful investments from a young age, especially businesses their families had already found success in.
The Philadelphia Inquirer story noted that Carter-Williams' maternal grandfather was a horseman, who at age 30 bought 14 acres and built a barn in Hamilton, Mass., in 1959 and "never took a day off in his life." So maybe a portion of Carter-Williams' locked-up millions will ultimately travel to the country lane where his grandfather's work ethic laid the foundation for his own success, working in a different kind of lane.
Butowsky worried, though, that the focus on Carter-Williams' decision to lock the money up obscures the larger, more important point for athletes as long-term investors, especially since the typical NBA career means retirement by 27. (Only 27 percent of NBA players are 30 years old or older, according to Findthedata.org.)
"The career window is so limited with these athletes," Johnson said. "Understanding how to protect their assets early on is key. ... That gives them the ability to focus on putting the puck in the net, or making an interception or a 3 at the buzzer."
"Lots of athletes have become much more conservative with their investments and that's good, but the second step is what has to happen, and that's education, and there is not one major professional sports league doing a great job in this area," Butowsky said, though he did note that the NBA has a representative on each team's staff who helps players manage personal life issues, including finances.
Butowsky said in a three-hour workshop an athlete can learn everything they need to avoid going broke, and No. 1 on the list is not putting any money into private investments until they have saved at least $3 million after tax, and even then, devoting only 5 percent to private investments spread across five distinct projects.
"Only one out of every 30 private investments works out," Butoswky said. "Private investments coupled with real estate, except a home, and spending, is the reason athletes, like any people, go broke. It's not public securities," Butowsky said. "You have to educate athletes on how not to make mistakes."
So locking the money up is a tight D, but far from a full game plan.
—By Eric Rosenbaum, CNBC.com