Lessons from the Rich and Famous

Lessons from the Rich and Famous

It was a sad day in June when two legends passed away, Michael Jackson and Farrah Fawcett. Both under completely different circumstances, one died unexpectedly while the other succumbed to a long battle with cancer. So what lessons can we learn from these two tragedies?

Guardianships for Minors

While it may be questionable whether Michael Jackson was biologically responsible for his three minor children, we are certain that those children were legally his. According to his Will, Jackson named his mother as guardian over the children. While the mother of the children apparently gave up any parental rights some time ago, it would not stop her from trying to contest it. Still, the court would give great deference to the wishes of Jackson because of his Will. Therefore, it is very important that anyone with minor children should have a Will designating who they want to take care of their children if something were to happen to them.

We are not aware whether Jackson established a Trust for his minor children. In Florida, a minor cannot receive more than $10,000 as an inheritance. If any amount is passed to minor children in excess of that amount, then the law requires that a guardianship is set up. A requirement of a guardianship is that an annual accounting is filed with the court along with a fee that is calculated by the amount of assets in the guardianship account. This can be an expensive process which would deprive that child of money that would otherwise be left to them.

Asset Protection Trust/ Special Needs Trust

Unfortunately, Farrah had a different set of issues. Her son Redmond was incarcerated in LA County Jail at the time of her death. This was due to a possession of heroin charge. Obviously, Redmond has a horrible addiction problem as this prevented him from being at his mother’s bedside when she passed away. Without any knowledge of Farrah’s estate plan, let’s hope she received quality advice. So how does one provide for their child but “save them” from their addiction problem rather than feeding it? Or sometimes, a drug problem progresses so far that it leads to a disability, how does a loving parent plan?

Sometimes, despite a parent’s best efforts, their child does not turn out the way they had planned. Maybe their son has a problem with addiction. Maybe their daughter has declared bankruptcy three times despite making over $100,000 a year. Or maybe they are good kids but are involved in a bad marriage or an unlucky car accident. With proper estate planning, a parent can plan around these types of foreseen and unforeseen events and still protect and provide for their children. If that child has cognitive impairments or other disabilities whereas they are provided with government assistance, proper planning is required so that the child is well taken care of without losing such valuable assistance.

Many of us procrastinate, minimize our personal need or the legal importance of drafting wills, trusts, living wills, and durable powers of attorney. The complexities of combining and coordinating diverse assets such as individual assets, jointly held assets, retirement plans, life insurance, annuities and business interests seem just too daunting for some. For others, they do not realize the importance of looking at all of their assets from an overall perspective; namely, when all is said and done who ends up with what.

Estate planning is not only for the wealthy. As you see in these two examples, Michael Jackson and Farrah Fawcett faced real life problems that we all may face. Estate planning is about family and making sure that you are passing on your assets to whom you want, when you want and the way you want. Protect yourself, and your family.