A recent Forbes.com article listed five estate planning lessons to be learned from Paul Walker’s Estate:
Leave assets in a trust. Paul Walker created a pour-over will that left his assets in a revocable living trust, intending to avoid the Court process, called probate, that (when handled properly during life) makes everything totally private and keeps it all out of Court. Unfortunately, while Paul Walker had a Trust, it wasn’t properly funded … and this is an all too common estate planning failure, even when working with a lawyer.
Most lawyers simply do not handle funding of assets, the single most important part of estate planning, because they’ve been trained to be document drafters, not consigliere.
Fully fund your trust. The contents of Walker’s estate, who will inherit it and when are public knowledge because Walker’s lawyer didn’t take the necessary steps to make sure his Trust was properly funded. Sadly, this isn’t even a case of malpractice (though it should be) because it’s common practice in the world of estate planning lawyers.
When you do estate planning (or if you already have), the most important thing you can do is ensure your assets are transferred properly.
Name guardians for minor children. Walker’s daughter is still a minor, and he did name his own mother as the guardian for his daughter Meadow in his will. Meadow’s mother is still alive, so the grandmother will likely not assume guardianship unless Meadow’s mother is found to be unfit.
Don’t wait to do estate planning. Walker was 28 when he created his will in 2001, the year the first Fast & Furious movie debuted. While we will never know what prompted him to create an estate plan so early – perhaps it was his young daughter or a feeling that his star was on the rise – he did the right thing in planning early, especially considering his untimely death.
Keep estate plans updated. Not only did Walker’s attorney not ensure his assets were titled properly, but he never updated Walker’s estate plan from the original version created 12 years before he died.
Walker’s net worth changed significantly during that time, and so did his estate tax status. If his estate is $25,000,000, as we’ve read, his family will pay over $5,000,000 in estate taxes. We think that’s unconscionable because with proper planning that could have all been structured to pass on to his family instead of the Government.
If you would prefer your family to receive what you are passing on, instead of it ending up in Court, conflict or the hands of the Government, you must update your estate plan at least every three years, and ideally you will review your assets and important changes every year.
To learn more about putting the right legal and financial protections in place for your family, contact our office to schedule a time for us to sit down and talk. We normally charge $750 for a Family Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.