Michael Jackson, the King of Pop, had an estimated net worth of $600 million. However, unfortunate for Jackson’s family, none of his property or assets were placed in trust. His beneficiaries had to go through probate court in order obtain access to his assets and personal property. All of this could have been avoided had Jackson properly placed his assets in a living trust.
More importantly his beneficiaries would have been at ease knowing where and how the assets were going to be divided up amongst themselves. Instead, they had to hire expensive lawyers and spend more time and money getting it estate corrected.
Having an estate plan is one of the most important steps in the financial planning process. They are often overlooked because they don’t seem necessary. In fact, about 60% of Americans don’t have any estate plan set up.
Having an estate plan can help you better transfer your assets after your passing. Trusts are one of the best ways to shelter assets from probate.
What is a trust?
A trust is a legal document that is set in place to help protect assets from any additional probate or litigation that may be brought upon an estate. The trust has three parts to it and is quite simple. The Grantor sets up the trust, and while living, has control of how assets are allocated to beneficiaries. The Grantor maintains control of the trust as long as they are alive as a trustee of the trust. The trustee who is often the actual Grantor oversees administering the trust. The trustee is responsible for following the rules outlined in the trust document. Lastly are the Beneficiaries. These are the folks who will receive the assets that were placed within the trust. Upon the passing of the grantor, the beneficiaries will receive the assets as either a percentage or otherwise specified amount according to how the trust was written.
Many times, life circumstances change. Maybe it’s a new house, child, or even grandchild. Whatever the case may be, you should always update your estate plan so that it reflects your current situation. This is an important step once you have established an estate plan because it allows you, the owner, to maintain control of how your assets will be divided up. The last thing you want to do is end up like Michael Jackson, having not have placed any of your assets in trust. You’ve spent a lifetime working hard to grow your assets and provide for your family, and having a properly executed trust and estate plan is absolutely necessary.
If you haven’t taken the time to review your current estate plan, this is your reminder. If you haven’t had the opportunity to get a Will or Trust established reach out to our office, as we have agreements in place with local estate planning attorneys that can help you create these necessary documents to ensure your hard-earned assets are safeguarded.