Paul William Walker IV was the star of the Fast & Furious movies, until his unfortunate -- and ironic -- death in a high-speed car accident on November 30, 2013. The car, in which Walker was a passenger, was found to have been doing at least 100 mph. Walker was 40 years old when he died, survived by his parents and his 15-year old daughter, Meadow Rain Walker.
Recently, Paul Walker's father filed to open the estate, including Walker's Last Will and Testament, which you can read here: Read Paul Walker's Will. It sheds some interesting information about the Paul Walker Estate and highlights some valuable estate planning lessons.
First, the probate filing and will reveal that Walker had assets of about 25 million dollars, including 8 million in personal property (which would include cash and investments), $8.5 in expected income, and another $8.5 million in real estate (after subtracting mortgages).
Second, the filing shows that Walker had a revocable living trust, benefiting his daughter as the sole beneficiary. Trusts, unlike wills, are private documents -- so we do not get to see the actual trust document. The probate documents only reveal that the trust exists and that Meadow is the sole beneficiary of it.
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.
4. No One Should Wait Until They Are Old To Do Estate Planning.
Paul Walker's will was signed in August of 2001, when he was only 28 years old. This is the same year his first Fast & Furious movie was released. Walker is to be commended for preparing a will and trust at a young age, before he was well-known movie star. Far too many adults in this country wait until "someday" to prepare even a basic will. No one should ever procrastinate with estate planning! Walker certainly didn't plan to die in a car accident.
5. Wills, Trusts, And Other Estate Planning Documents Need To Be Updated.
While Walker gets kudos for planning ahead, he loses points for failing to update his estate planning documents before he died. His death was more than twelve years after he signed his will. There are too many changes in life over the course of twelve years -- especially when Walker's net worth grew so much during that time -- to rely on the same old documents.
What if Paul Walker did not want his young daughter to inherit so much? What about his girlfriend of seven years, Jasmine Pilchard Gosnell? Didn't he want Gosnell to receive something from his will and trust, considering they were planning to marry one day? What if Walker's parents were not physically able to act as executor or guardian? These are all reasons to revisit and update estate planning documents.
On the other hand, Walker could have provided for Gosnell in other ways, like a joint bank account or life insurance policy. However, even if none of his wishes expressed in his will and trust had changed, his tax status certainly did. Twenty-five million dollars is well over the federal estate tax threshold. Likely, Paul Walker's assets were not worth that much in 2001. He could have taken advantage of any number of tax-avoidance strategies to reduce the estate tax bill. Because he didn't do so, the tax consequences will ultimately be paid by his daughter.
These are all good lessons to share with loved ones, clients and prospects -- or even to think about yourself. How does your will and trust measure up to Paul Walker's? Why not visit an experienced estate planning attorney and find out?
By Danielle and Andrew Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights! 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+.