Who would have thought?

When our Firm receives calls from three people (around the age of 50) in one day to suddenly get started with their estate planning, you know there has been a seismic shift in terms of how people think about this work. It’s not just for the elderly. It’s for everybody !

There are very few deaths that will garner more attention than that of a celebrity. Michael Jackson’s recent passing at the age of 50 is one such death that serves as a wake-up call. High-profile deaths often bring about interesting responses from people. In one day we witnessed two. Farah Faucett’s, though tragic, was not unanticipated given her battle with cancer. Michael Jackson’s however, was a surprise for most and a reminder that it can happen at any age.

From what we have been able to ascertain so far (simply by what is made publically available from court filings), Jackson’s Will is similar to the Wills we often provide our clients. It is known as a Pour Over Will and intended to place all of his assets in trust for the children and other beneficiaries in his Family Trust. The Family Trust was likely a Revocable Living Trust (which, if properly drafted, becomes Irrevocable at death.) If handled correctly, we should never know the detailed provisions of the Family Trust since it is not required to be filed with the Court.

However, depending on whether his Family Trust was ‘funded’ during his lifetime, will inform whether we learn more details about his assets. Typically people do not complete this funding process (which essentially involves re-titling of assets from one’s personal name to the name of one’s trust) and instead rely on the Pour Over Will after death to get the assets into the trust. This process is the Probate process that we all know about and usually try to avoid. We will not know for some time yet whether the Pour Over Will is actually going to be used to re-title assets into Jackson’s Family Trust. My guess is yes – and – it will cost the family considerable time and money with lawyers and other professionals to do this which is why we usually recommend to our clients to fully fund, and keep updated and funded, their trusts during their lifetime.

Concern about privacy is obviously important for celebrities – but – it is also important for families wanting to protect their loved ones from unwarranted solicitations from any number of vendors. Keeping details of a family’s finances out of the public eye is an important benefit to doing estate planning with these types of trusts – and funding them during your lifetime and keeping them updated. There is always the risk that somehow (from a beneficiary or otherwise) Jackson’s Family Trust could be leaked to the press and would become publically available anyway.

People have asked us: “What about his debts?” Revocable Living Trusts usually do not a provide any way to avoid debts you accumulate during your lifetime. (This can vary based on state law.) Generally speaking, you are your revocable living trust for purposes of creditors and therefore your debts are not extinguished at death. (There are other types of planning vehicles for asset protection that sometimes can address these issues.) A trust can, if properly drafted, provide certain creditor protections, remarriage protections and other types of protections, but only after the funds have been properly placed into that trust. Michael Jackson’s affairs will need to be put in order including selling property, paying debts, settling claims, etc. After that, any assets left will be available to his children and other beneficiaries through the terms of his Family Trust.

So, while Michael Jackson did indeed have a Will, it is still unclear how the trusts were set up and funded. We will not know for some time whether these were properly drafted to provide the important protections they should. We cannot stress how important it is to update your estate plan.