Paul Walker, star of the Fast & Furious movie franchise, died tragically in November 2013 due to a high-speed car accident at the age of 40. Walker created a revocable living trust long before his untimely death and long before his movie stardom when he was just 28 years old. His estate was opened January 2014 in the Superior Court of California, County of Santa Barbara probate court revealing that he left assets of $25 million. His survivors include his 15-year-old daughter Meadow and his parents. Though he took the initiative to create an estate plan early on, there are some mistakes with his trust that everyone can avoid with more careful planning.
An article on Forbes.com listed five estate planning lessons that you can learn from Paul Walker’s Estate:
Place your assets in a trust. Paul Walker did a good thing by creating a pour-over will that placed his assets in a revocable living trust with the intention to avoid the court process also known as probate. This is to ensure that everything is kept private and out of court. Even though Walker had a trust, it wasn’t properly funded – a surprisingly common mistake made by many, even with the guidance of a lawyer. Most lawyers just do not handle funding of assets which is the most crucial part of estate planning. A lot of lawyers play the role of document drafters rather than consigliere which can ultimately cause a pitfall in your estate planning.
Ensure your trust is fully funded. The fact that the contents of Walker’s estate are known to the public reveals that his lawyer didn’t take the necessary steps to make sure his trust was fully funded; therefore, the public knows who will inherit his estate and when. Unfortunately, this isn’t a case of malpractice because it’s an incredibly common practice, but it should be considered as such. The most important thing you can do is to make sure your assets are properly funded when you do your estate planning.
Name guardians for your minor children. Walker named his mother as a guardian for his daughter who is still a minor. Though Meadow’s mother is still alive, if she is deemed to be unfit to take care of Meadow then Walker’s mother will assume guardianship.
Don’t wait to do estate planning. Walker created his will when he was 28 years old in 2001, the year the first Fast & Furious movie hit theaters. Though we might not know what prompted him to create an estate plan, he made the right decision by creating one early considering his untimely death.
Always update your estate plans. Aside from the mistake of not ensuring that Walker’s assets were titled properly, his attorney also never kept Walker’s estate plan up to date. The original 2001 version was kept despite Walker’s change in economic status. Walker’s net worth changed significantly during those 12 years, and so did his estate tax status. If his estate is $25,000,000, as we’ve read, his family will pay over $5,000,000 in estate taxes. We think that’s unconscionable because with proper planning that could have all been structured to pass on to his family instead of the government.
If you would prefer your family to receive what you are passing on, instead of it ending up in court, conflict or the hands of the government, you must update your estate plan at least every three years, and ideally you will review your assets and important changes every year.
To learn more about putting the right legal and financial protections in place for your family, contact our office at (209) 877-7457 to schedule a time for us to sit down and talk. We normally charge $750 for a Family Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.