Where will his money go? We may never know

Posted on July 8, 2009 by John Hugg

In the coming months we will no doubt, hear lots and lots about Michael Jackson’s estate. Is he the father of all his children? Will other Wills pop up as in almost every other celebrity probate? Who will control his estate? And on and on. But all the tawdry details aside, we can learn something about how to set up our own estates.

Michael Jackson’s Will did at least one thing very well. In it, he named a guardian, in this case his mother, to care for his minor children. Everyone with a minor child, regardless of the size of your estate, should have a Will and name an appropriate Guardian.

A recent Wall Street Journal article reported that Mr. Jackson left the bulk of his estate to a Family Trust. The trust purportedly provides for his children, his mother and various charities. Based on the language used in the WSJ article, it sounds as if Mr. Jackson set up a Revocable Living Trust where he was the creator of the trust and the trustee while he was alive. This type of trust is commonly used to avoid probate (although not in all cases), reduce costs and maintain privacy. The privacy aspect is why we may never know the full extent of the family trust and what it says. A Revocable Living Trust is not appropriate in all circumstances and does have a few drawbacks, but it's often a useful estate planning tool, especially if you own property in more than one state.
 

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A Parent's Most Important Decision?

Posted on June 4, 2009 by John Hugg

One of the most important decisions you may ever make as a parent could be selecting a guardian in your Will to raise your children. First, a little background about naming a guardian for your minor children. In Washington, the only method where you can be certain your guardianship wishes are honored is through your Will. Stating orally or in a separate writing who you want to raise your children may give a court some guidance, but is not required to be honored. If, however, your Will says who will raise your children when you are gone, a court is required to honor that designation. There are only limited situations where your selection would not be honored: such as if the person chosen is deceased or incapacitated. Such a selection will certainly minimize the risk of a custody battle between competing individuals.

So who is a good choice for this role? That is different for every family. Many of my clients choose a sibling; some choose a parent. Here are some things to keep in mind in making the selection:

  • if I choose my parents, will they have the physical ability to care for and raise a young child?
  • If you choose a sibling or a friend, does that person have similar values and beliefs regarding child rearing? This is probably the most important factor. For instance, if you are deeply religious, leaving your kids to your brother who has forsaken all religion may not accomplish your goals.

A question I am almost always asked is – “Can I name my brother and his wife as co-guardians?” The answer, of course, is yes. But you should consider the ramifications of such a choice. If your brother dies while raising your child his wife, to whom you have no relation, is now raising your child. Another issue arises from the unfortunate possibility your brother and his wife may divorce. If you’ve named co-guardians, the next question is who will continue to raise your child? Of course, your attorney can easily write language in your Will that can solve these thorny little issues.

One last thing to keep in mind if you do not have a family member capable of raising your children, is the potential for the guardian to move out of the geographic area where grandparents may live. If the guardian is relocated out of state and away from a grandparent, you may want to consider language that terminates the guardianship and provide for the alternate guardian to assume that duty (assuming the alternate lives near the grandparent).
 

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