NFL star Adrian Peterson made close to $100 million but apparently can’t pay his debts

Adrian Peterson will likely earn close to $100 million over the course of 12 seasons in the NFL.

Now, he’s battling creditors in court over millions in unpaid loans.

The Washington Redskins running back is making headlines again over a state supreme court case in New York.

DeAngelo Vehicle Sales LLC, a McAdoo, Pennsylvania-based creditor, is suing Peterson, alleging he had failed to fully repay a $5.2 million loan. With interest and other fees, the sum claimed comes out to $6.6 million.

The suit was originally reported by The Athletic.

Further, a state court in Maryland recently ordered him to pay $2.45 million to another creditor, Democracy Capital Corp. of Bethesda, Maryland.

While some may wonder how a person so handsomely compensated can fall into a debt trap, the answer may lie in a combination of overspending and poor advice from financial counselors.

“The truth behind Adrian Peterson’s current financial situation is more than is being reported at this time,” said Peterson’s attorney, Chase Carlson, in a statement on Twitter.

“Because of ongoing legal matters, I am unable to go into detail, but I will say this is yet another situation of an athlete trusting the wrong people and being taken advantage of by those he trusted,” Carlson said.

Though professional athletes often are blessed with more wealth than most people will ever see in their lifetimes, they are fat targets for scammers and they still struggle with saving and budgeting.

One example of out-of-control spending: Peterson apparently threw a lavish 30^th birthday party in 2015, photos of which have resurfaced amid his current legal woes. Some 320 guests attended the festivities, which featured elaborate ice sculptures and a rented camel, according to ESPN.

It’s a high-stakes game. While a rookie NFL player on a team’s active list earns a minimum salary of $495,000 in 2019, the average career lasts 3.3 years, according to the NFL Players Association.

“We consider professional athletes to be high-risk clients, in the sense that, depending on the sport they play, they may have a short window for earning,” said David Lopez, CPA and member of the American Institute of CPAs’ consumer financial education advocates.

“They’ve won $10 million — that person’s head is spinning,” he said. “They’ve never been versed in handling that money.”

The NFL Players Association offers players access to financial professionals who sign up for its Financial Advisors Registration Program.

Participating advisors must pay a $2,500 fee, have a minimum of 8 years of licensed experience and must be a certified financial planner or a chartered financial analyst.

However, advisors say that these requirements don’t go far enough.

Players must learn to vet financial professionals on their own, said Robert Pagliarini, a CFP and president of Pacifica Wealth Advisors of Irvine, California.

That means digging up their details on the Financial Industry Regulatory Authority’s BrokerCheck website and the Securities and Exchange Commission’s investment advisor search site.

Researching an advisor’s background is only the beginning. Players should also make sure advisors hold clients’ assets at a custodian.

“The advantage of keeping money at a custodian is that the custodian sends monthly statements to the client,” said Pagliarini, who works with athletes and other sudden wealth clients.

“You don’t want the advisor to have full access to the assets.”

Athletes must also make sure that their advisors, accountants and attorneys are all serving in their best interest.

“Only hire accredited fiduciaries,” said Jordan Waxman, a certified finanical planner and managing partner at HSW Advisors in New York. “Have a team of them.”

A common trap for professional athletes is to have one individual oversee all their money, including their investments and their regular monthly cash flow.

By having a team approach — an investment advisor, an attorney and an accountant, for instance — athletes can compartmentalize their finances.

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In this manner, they can also build a system of checks and balances so that no one professional has full control of their assets and incoming pay.

“Let’s imagine that an athlete’s monthly expenses are $25,000 a month,” said Pagliarini. “The advisor can set it up so that $25,000 is transferred from the investment account to a checking account that the business manager can use to pay bills.”

That checking account would have no more than $25,000 in it at any given time, to minimize any potential for malfeasance.

Building long-term wealth begins with the fundamentals, including budgeting.

“A million dollars isn’t really $1 million, so let’s think about how to budget and what the goals will be as far as savings and what you can afford,” said Lopez.

Athletes must be mindful of income taxes, as well as gift taxes — the levy they’ll need to pay for gifts they’ve made in excess of the $15,000 annual exclusion per recipient.

“Taxes are like holes in a rowboat,” said Waxman. “You can keep going and row to the middle of the lake, but eventually you’ll end up full of water and the boat will sink.”

After setting aside money to cover taxes and paying the bills, advisors need to address clients’ investments for the future.

Lopez recommends that his rookie athlete clients put away 12% to 15% of their paycheck, investing it for the long term.

Athletes’ wealth makes them a target for elaborate real estate deals, limited partnerships and other illiquid investments.

“Don’t invest in that bar or that nightclub,” said Pagliarini. “Stick to exchange-traded funds and mutual funds.

“There’s plenty of money to be made without doing these esoteric black-box investments.”