What family won’t be talking about Kim Kardashian and Michael Jackson at their Thanksgiving dinner? Dishing celebrity dirt is as natural as turkey and pumpkin pie. But did you ever think that celebrity gossip could actually help your family?
We use celebrity stories to turn the often-awkward conversation about estate planning into something fun and entertaining. Let’s face it … no one really likes to think about planning for what happens after they pass away. But, it’s the family left behind that pays the price when the proper planning isn’t done.
A great way to get the dialogue flowing, and to turn an awkward conversation into something fun and engaging, is with celebrity stories. What better time to do this than when the family is gathered together for Thanksgiving?
Here is Part 1 (out of 2) to our Trial & Heirs’ Top 5 Celebrity-Based Estate Planning Conversation Starters for Thanksgiving 2011:
Seventy-two days of marriage. Wow that was fast! Did she even finish writing her thank-you notes from the wedding?
Let’s assume for a moment that the happy couple thought, after saying their wedding vows, that they’d spend the rest of their lives together. Well, even if they didn’t feel quite that strongly about one another, this still marked a significant life event. This means, the lovebirds should have updated their estate planning documents.
Even with a marriage this short, everyone needs to sign new wills, trusts, and other estate planning documents as soon as they are married. Otherwise, any prior wills or trusts may be useless. Even worse, it could spark fighting, as in the James Brown Estate.
And then, when the man-and-wife decide it’s not going to work out, it’s important to update yet again. Who wants an ex-spouse to inherit the assets … or worse, be named in end-of-life documents, and decide to pull the plug? It happened to Gary Coleman.
It’s much better to update documents before the divorce is even final, as Dennis Hopperdid. Kim would be well-advised to so now. If she were to pass away before the divorce judgment is entered, Kris Humphries would still be treated under the law as her husband, entitled to inherit a share of her estate even if he wasn’t mentioned in the will … unless Kim properly updated her documents.
2. Michael Jackson
With so much focus on the trial of Dr. Conrad Murray, things have been quiet on the estate-fighting front. The trial, guilty verdict and controversial NBC documentary about Murray have been some of the few things that Michael’s family members and estate executors have seen eye-to-eye on. For the most part, that hasn’t been the case since the King of Pop passed away.
When Michael died on June 25, 2009, the fighting between his family members versus the lawyer and music executive in charge of his estate and trust began almost immediately. Things have been peaceful lately, especially because the executors announced they would fund Michael Jackson’s trust with $30 million. Funding is when assets are transferred into a trust.
But, does this mean all the fighting is over? Forbes recently named the MJ Estate as number one on its annual list of top-earning deceased celebrities, with $170 million in earnings in last 12 months. At least until recently, the family has received none of this, other than having their living expenses paid.
Now that the trust is being funded with $30 million, that means there is money that can actually be distributed to Michael’s mother, Katherine Jackson, and Michael’s three children. They, along with charity, are the named beneficiaries of Michael’s trust.
The catch to this? Funding the trust is not the same as distributing money to the trust beneficiaries. It just means that the money was moved from the estate into the trust. The trustees — the same two people acting as estate executors — still control that money and decide when and how much to give to Katherine and her grandchildren.
Most people should transfer their bank accounts, real estate and other assets into their trusts during lifetime. Because Michael’s assets were not funded into his trust until after he died, his assets still had to pass through probate court, which is time-consuming, expensive and very public. And, there is a good chance the fighting will continue in his estate, now that the Conrad Murray trial is over and he was found guilty. The family may begin to focus on other matters again.
So, when you ask your mother to pass the gravy, consider asking her if she funded her trust so she can avoid the same mistake made in Michael Jackson’s estate planning. If not, her financial planner and estate planning attorney can help her.
Next week, we’ll give you more Thanksgiving conversation material, including the latest with the Whitney Houston lawsuit against her step-mother, the wild estate of boxer Arturo Gatti, and what happened with the fight over the billions that belonged to the richest woman in Asia before she passed away.
Do you think she really wanted her feng shui advisor to inherit it all?
By Danielle and Andy Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights!, husband-and-wife legacy expert attorneys, and hosts of the national television special, Trial & Heirs: Protect Your Family Fortune! For the latest celebrity and high-profile cases, with tips to protect yourself, your loved ones, and your clients, click here to subscribe to The Trial & Heirs Update. You can “like” them on Facebook and follow them on Twitter and Google+.