Five Estate Planning Lessons From The Paul Walker Estate

Here is a celebrity that had an estate plan worth modeling yours after. Unlike so many public personas that don't put much in the concrete planning, Paul Walker planned for his daughter to be taken care of over time. She will not automatically receive a lot of money when she turns eighteen, which will avoid the urge to spend irresponsibly. Read the article for more information.

What lessons can we draw from this?  Good question!

Here are Trial & Heirs’ Top 5 Estate Planning Lessons from Paul Walker’s Estate.

1.  Paul Walker Placed His Trust In A Trust.

Having a will is only the start.  A revocable living trust is the best estate planning tool for most people.  Walker’s will left all of his assets to a trust he created, which means the probate process will be much simpler and less onerous than it could have been.

Hopefully, the trust also means that his young daughter will receive Walker’s millions in a controlled fashion, over time — not all at once when she turns 18.  Trusts done by good estate planning attorneys typically stretch out distributions for young adults, but we don’t know for certain with Paul Walker’s trust because it is a private document.

2.  To Be Most Effective, Trusts Need To Be Fully Funded During Life. 

The reason we do know that Walker had a will, trust, and 25 million in assets is because he didn’t fully fund his trust.  When trusts are fully funded — meaning that assets are transferred into the name of the trust during lifetime — then there is nothing left to pass through the will.  This means the probate court process can be completely avoided.

Instead of this, Paul Walker relied on his will, which is a pour-over will that passed everything along to his trust.  The end result is the same, because the trust — not the will– dictates who receives the assets and when.  However, the public scrutiny, cost and hassle are much higher than if he had completed the proper funding ahead of time.  Had he done so, it would have kept his family’s affairs private — wills and all probate filings are public record.

3.  Naming A Guardian For Minor Children Is Always A Good Idea.

Paul Walker gets a big point for naming a guardian for his daughter, Meadow, in his will.  Does that mean that Meadow’s mother will now lose custody of her?  Not necessarily.   The law still favors the custodial parents, meaning that Meadow’s grandmother will not take over guardianship unless the mother agrees or is found to be unfit.  It was still smart for Walker to address guardianship though, in case Meadow’s mother isn’t able or suitable to keep custody for any reason.

That may prove to be the case here, if media reports about the mother’s alleged drinking problems are true.  Reportedly, Meadow was already living with her grandmother and she may in fact become the guardian.  This report may not be accurate, however, because the probate filing indicates that Meadow lives with her mother, not her grandmother.

To read more:

  

http://www.forbes.com/sites/trialandheirs/2014/02/10/five-estate-planning-lessons-from-the-paul-walker-estate/2/