Lessons from Michael Jackson
Thursday, July 9th, 2009 at 9:03 am
Before he died, it’s a good thing that Michael Jackson made a smart estate plan. He provided and cared for his loved ones because a separate document gathered his assets (estimated to be over $500 million, which exceeds his debt by $200 million). It’s called a family trust - this ensures that his affairs would stay out of court and out of the eyes of the public.
He established this trust along with his will, and it’s also called a “living or revocable trust.” The goal of this estate-planning tool would be to transfer all the property - including real estate, bank accounts, and cars - into a separate owned entity while maintaining the control as a trustee. In Jackson’s case, he established a “Michael Jackson Family Trust.”
At his death, the control will be transferred to his successor trustee or co-trustee. Most people (Jackson included) will set it up to “pour over” - this means that whatever assets remain outside of the trust would be eventually be added to the estate at their death.
The beauty of this trust is: people can avoid a public process called probate. Aside from celebrities, this process would also make sense for people with significant assets because it would spare their heirs from a prolonged legal process.
Tags: assets, co-trustee, estate plan, Family Trust, legal, living trust, Michael Jackson, probate, revocable trust, successor trustee, trust, trustee, will