Too Fast, Too Soon: Estate Planning Lessons from Paul Walker
Paul Walker, an actor who starred in popular movies such The Fast and Furious, died tragically in a car accident at the age of 40. Walker was unmarried at the time and had one daughter with former girlfriend Rebecca Soteros. Walker’s entire estate, which has been reported to be about $45 million, is left to his 15 year old daughter Meadow. Walker’s father has filed the will with court and has been appointed executor of his estate. There is some controversy over the fact that Walker requested that his own mother be appointed guardian of Meadow, and not Soteros. There is likely to be a court battle among Walker’s parents, Meadow’s mother, and Walker’s recent girlfriend, Jasmine Pilchard-Gosnell, who was left nothing in his estate plan and was helping to raise Meadow.
Are there lessons to be learned from the Walker estate in planning our own estates?
Use a Revocable Living Trust
The use of a Revocable Living Trust allows you to pass your assets to your heirs without the necessity of going through probate. Although Walker did have a Revocable Living Trust, it was only partially funded, which means that he did not transfer all of his assets into the Trust. As a result, the portion of his estate that was not owned by his Revocable Living Trust must pass through probate, and this opens his estate up to challenges by interested parties and additional costs. So, not only is it important to have a Revocable Living Trust drafted and signed, it is equally important to follow up and make sure that you transfer all of your assets into the name of the trust. In addition, a trust offers privacy whereas a will is public record.
Appoint a Guardian and Trustee for Your Minor Children
If you have a minor child, your will should contain provisions that appoint a Guardian to take care of your children in case you die prematurely. The court will then consider your recommendation when it comes time to appoint a guardian for your child. Sometimes you will want to appoint someone other than the child’s parent as the guardian, because the parent may not be able to financially or emotionally take care of the child. According to reports, Walker may have appointed his mother as the Guardian of his daughter because of Soteros’ issues with alcohol abuse. It is important to put your wishes in writing so the court will be informed of your preference for your child’s guardian.
In addition to a guardian, your will should appoint a Trustee to manage property passing to a minor child. The trustee will control the funds in a separate trust for the child until the child reaches an age that you determine, e.g. 21, 25 or 30. The trustee may or may not be the same person as the guardian. Sometimes you will want to appoint one person to be the guardian who will take physical care of your child and appoint another individual to be the trustee, whose sole job will be to manage the money. You can put provisions in your trust that will allow the trustee to pay for education, college, and other expenses of your child, and you can decide at what age or ages you would like your child to receive money. If you do not have a will that sets up a minor's trust, all of the funds will be distributed to your child outright when your child reaches the age of majority (18 in most states).
Of course no one expects to die at such a young age as Walker did, but at least he did have a Revocable Living Trust and a Will to direct how he wanted his assets distributed. He could have planned better by putting all of his assets into the Revocable Living Trust, done tax planning to help avoid estate taxes, or create a charitable trust for the non-profit he was involved in, but even an imperfect plan is better than no plan at all. It is important to get an initial plan in place, and to review and update it every few years as your circumstances change. Please contact the Pierro Law Group to help start the estate planning process or to review and update your current documents.