Making Sense of Michael Jackson’s Will
January 9th, 2010 Filed under: ab trust,Executor Fees,sample wills,Trusts attorney — Estate Planning Author
Almost as soon as it was released, Michael Jackson’s will was raising more questions than it answered. While it provided on one hand ideas of what sort of documents a high profile professional should have in place, it also points out why every person should have a professional guide them in estate planning.
He designated his mother Katherine as the guardian of his children, provided for Diana Ross to be successor guardian if Katherine was unable or unwilling to become guardian, and designated that all his assets be placed into his trust.
Any will is a matter of public record, as shown by the attention it has received. A trust, however, bypasses probate (but not the estate planning/taxation process) and allows certain things to remain private.
Ordinary people should realize that should they die without a will (called “in testate”), Ohio State Probate Law provides for division of property by linear succession; in other words, your next closest living relatives, whether you want them to or not, may get whatever you leave.
If you don’t have much to leave, perhaps it doesn’t matter to you. If, however, you have any sort of assets to be distributed, you had better consider the question of how you want those assets passed on to others.
Michael had substantial assets, which will be subject to 45 percent Federal Estate Taxation as well as settling debts that were outstanding from his lifestyle. After having to liquidate some of the assets and depending upon how much life insurance is in his Life Insurance Trust, there will possibly still be a large tax payment due, particularly after the expenses that will be involved in inventory of the assets of the total estate that will become part of the trust.
If the net estate is valued at $300,000,000.00, the estate taxes that could be due may be as high as $131,969200.00 after the $3.50 million dollar exemption and $1,455,800 credit. If his insurance trust was properly funded, it will either replace or fund payment of estate taxes and provide liquid assets for his wealth replacement.
Point being, unless you have a full estate planning team in place including Attorney, CPA and Insurance Professional, you could be in bad shape as well.
Adrian Powell, Fraternal Insurance Counsellor, is the founder of Advanced Planning, Pensions & Financial Advice. He has written articles on finance, business and investing for the Columbus Post, The Call & Post, Purpose Magazine, Urban Trendsetters and http://www.yournewscolumbus.com.
He is a member of the Society of Financial Services Professionals and National Association of Insurance and Financial Advisors. His e-mail address is adrian4yourmoney@gmail.com. His website is http://www.advancedplanningfinancialadvice.com.
