Actor Paul Walker, best known for his roles in The Fast and the Furious franchise, died on November 30, 2013 in a one car accident near his home in California. Only 40 years old at the time of his death, this tragedy offers several lessons for estate planning.
Walker utilized a Revocable Living Trust in his estate plan, keeping many details of his estate private. While privacy is obviously a concern for those in Hollywood, trusts are just as useful in protecting the privacy of regular folks who otherwise need to have their Will probated in court and registered as a public document. Since trusts avoid probate, the terms of the trust remain private.
Revocable Living Trusts are also useful in setting up and controlling the management of assets during life and at death. Inheritances can be structured so that they are disbursed over time or controlled by a third party. This can be especially useful for heirs that are minors or those with creditor issues or concerns of divorce. Revocable trusts can also offer great tax saving benefits for married couples.
However, funding a trust during life is critical to achieving many of its benefits, such as privacy. When Walker passed he had approximately $25 million of assets outside the trust. These assets will still have to be probated in order to be passed to his heirs. A “pourover” Will, which Walker had, will eventually put these assets into trust so that they can be managed by the trustee, but they will first need to go through the probate process. This could have been avoided had he funded his trust more completely during life.
A final lesson from Walker’s tragic death, and perhaps the most widely applicable, is that estate planning is important for the young and old alike. Failing to put together a comprehensive estate plan may not affect you, but it will certainly have negative consequences for those you love. Ultimately, estate planning is about caring for others.