Wills and “estate plans” are in the headlines these days with the death of Michael Jackson. And his estate planning demonstrates why you need to do more than write a simple will.
Most commentators don’t understand that Jackson’s will was a well thought-out document. It contained only what is minimally required of a will, which explains why it was only five pages long! And only the will must go through the public process of probate, which allowed fans to see his intentions.
But the critical information was hidden inside a living trust – the Jackson Family Trust – which contained all his instructions for disbursing his wealth, and the name of his successor trustee who is empowered to handle that process. So maybe Michael’s father, Joe, did inherit some money. Or maybe he didn’t. The public will never know!
Michael Jackson’s will dealt <<publicly>> only with issues required of a will – including custody of his children, specific provisions to exclude an inheritor (in his case, his ex-wife Deborah Rowe), the naming of executors, and the transfer of any assets not already named in the living trust into the trust.
That last part will be problematic. If there are claims against Jackson’s estate, only the assets remaining <<outside>> of the trust will be exposed to creditors’ claims. Since Jackson had good legal advice, it is certain that he re-titled most of his major assets in the name of his living trust. That would likely include the ownership of any real property, and probably the ownership of valuable items such as his share of the Beatles songbook.
How a Trust Protects Assets
If these assets were owned by the trust, and not by him personally, it will be harder for creditors to attach them to repay his personal debts. Once the grantor of the trust dies, the successor trustee takes over. The trust is now considered an irrovacable trust. Assuming that all the major assets were retitled in the name of the trust when it was created, or when they were purchased, the successor trustee has the responsibilty of distributing them per the instructions that the grantor made clear in the trust.