Robinson ♦ Thatcher, LLP

Posts Tagged ‘Steve McNair’

In the last few weeks we have had a number of popular celebrities pass away. In the midst of our grief on behalf of Farrah Fawcett, Michael Jackson, Steve McNair and their families, the furor over their estates provides us with a number of valuable lessons which we can use in our own estate planning.

Public information regarding the estates of each of these celebrities provides a framework to examine a number of issues including:

• Custody of Children
• Inheritance
• Continuing Parental Guidance
• Estate Taxes
• Privacy Concerns

Farrah Fawcett

Farrah Fawcett’s estate plan has not been officially made public.  There have been leaks from several “close confidents” which give us interesting insights into Farrah Fawcett’s estate plan.

From the sources available, it is evident that Farrah Fawcett employed a living trust to distribute her money upon her death.  The bulk of her estate was apparently left in trust to her son Redman O’Neill.  According to the Daily Mail article,Farrah appointed two trustees to manage the money for her son, and the trust was established with conditions to help him get his life back on track afterhis well known battles with drug addiction and legal problems.  Farrah Fawcett also gave a charitable donation to her alma mater, the University of Texas.

Farrah Fawcett’s estate highlights several proper estate planning techniques.  1) the creation of a trust allows her to provide continuing guidance to her son even after her death; 2) Charitable giving helps avoid estate taxes for very large estates (in 2009 there is a $3.5 million federal estate tax exemption, but the future of estate taxes is unsettled);  3) the trust is private.  Were it not for the “source” the details of Farrah Fawcett’s estate plan would not be made public.

MichaelJackson

Michael Jackson’s estate is teeming with legal controversy.  Although Jackson did have a living trust, it appears that the trust may not have been adequately funded.  (A living trust which is notfunded will be overturned – an important reason to have an estate planning attorney prepare a living trust on your behalf).

One aspect of Jackson’s estate which  is public is the will filed with the probate court on July 1, 2009. This will is an example of a “pour over will.”  Anything not included in the trust would be transferred into a trust through the probate process.

A key function of a will is to name guardians for your minor children, as Michael Jackson does in his will.  Generally, unless determined by a probate judge to be unfit, the guardians so named in a will be appointed by the court.

SteveMcNair

The estate of former NFL star SteveMcNair provides an illustration of what not to do.  McNair died without a will – or “intestate.”  Thus, all of McNair’s assets will be subjectto probate and will be distributed according to his state’s (Tennessee) laws of intestate succession.

To add a further layer of complication to McNair’s estate is the fact that he had two children out of wedlock.  Without a will to provide for these children, they will have to prove their right to inherit in probatecourt.  McNair’s widow, Mechelle McNairoriginally excluded his two older children from documents filed with theprobate court.  According to an interview with McNair’s agent, these issues have since been resolved.

Failure to implement appropriate estate planning documents, including a will and possibly a living trust will only burden your loved ones unnecessarily in the event of your death.  Losing a loved one is difficult enough, but to add complicated legal battles to grief for lack of simple planning is tragic.