Part 1: Michael Jackson
The king of pop had tried to live a very private life despite a career in the limelight. He did much throughout his lifetime to also shield his children from the paparazzi to provide them with much desired privacy. Although Michael Jackson took steps during his lifetime to create an estate plan and ensure that privacy at death, he forgot one very Important part. He forgot to fund his trust. When he died suddenly in 2009 at the age of 50, his private world became very public.
When clients come to my office to prepare an estate plan, we will meet initially to create the strategy and determine what the client wants in their plan, whom they want to provide benefit for and how. In Michael’s case, he provided 40% to be split among his children, 40% to his mother and 20% to charity. We then draft the documents with the specific instructions that are needed to accomplish those goals, review them with the client and when the documents are right, we will sign them in the presence of a notary and witnesses.
The next step is the most important, and the one that Michael, and many clients overlook – funding the trust. Funding means to change the title from your individual name to the name of the trust. In this particular case, it would mean changing the title on the checking account, real estate known as “Neverland” and the music rights to the “Michael Jackson Family Trust.” Since this wasn’t done, the probate court got involved and the whole estate became a matter of public record. A beneficiary who didn’t have a say in the trust administration, could be quite vocal in the probate proceedings and have their voices heard. Mrs. Jackson did exactly that and contested many of the executors’ decisions. Furthermore, the executors needed the approval of the probate judge to authorize partial distributions to the beneficiaries. Accordingly, we learned that the children require nearly $90,000 every month to maintain their current lifestyle.
If the goal of the estate plan is for your beneficiaries to have the “thriller” of a lifetime, then leave the funding for later, and perhaps forget all about it. But if the goal is to keep your financial and family matters private, then finish the estate plan the right way and make sure your trust is funded!
Have you funded your estate plan in order to protect what matters in your life?
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Linda M. Strohschein