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I don't want people to think that I'm obsessed with Michael
Jackson. I'm not. However, I am very interested in proper estate
planning, and I think that others should be too. The Michael Jackson case
is useful because it can show "ordinary" people what to do and what
not to do with regards to their own planning.
Many people do not know what a Revocable Living Trust is, or
how they work. The purpose of a Revocable Living Trust (which I'll refer
to as an "RLT") is to avoid probate when you die, and to avoid a
Guardianship if you become incapacitated. That's it. An RLT does
not protect you from creditors. It does not save you taxes. It does
not do many of the things that non-attorney Trust mills and hucksters claim
that it does. But used correctly, and, if you need one, it can be a
powerful tool that is an essential part of estate planning. In brief, a person
will transfer ownership and title of their assets while they are alive to their
RLT. Then, upon their death, and if the RLT was properly funded, the RLT
will be the owner of the assets and not the individual. Because the Trust owned
the property and not the individual, there is nothing to probate (again, if the
RLT is properly funded).
In a series of posts, I will examine Michael Jackson's Revocable Trust in depth. Feel free to
download the trust document so you can follow along.
Article One of Michael Jackson's RLT (which I will refer to
as the Trust) sets forth some basic information about the Trust -- i.e., it's
name, when it was established, that Michael Jackson has the power to amend
or revoke it at any time, that Michael Jackson has the power to add or
remove property from it at any time, and other general principles.
Michael Jackson is the creator (often referred to as the
"Settlor," "Grantor," or in this document, "Trustor"),
and he is also the Trustee. That means that while he was alive and able
to make his own decisions, he was the only person in control of the
Article Two of the Trust provides how the trust property
will be managed during Michael Jackson's lifetime. The Trustee (who is
Michael Jackson) shall pay to the Trustor (who is also Michael Jackson) the net
income of the Trust and the Principal of the Trust, as needed or on
request. But, if Michael Jackson were to become incapacitated, then
a successor Trustee would be appointed in his place to manage the property for
The real meat of the Trust starts in Article Three though,
which provides how Michael Jackson's estate will be distributed upon his death.
I continue my in depth
review of Michael Jackson's Trust. Part
here, and you
can download a full
Today we start talking about
the real meat of the
trust -- the dispositive provisions. In other words, who
Article Three of the Trust
provides that upon Jackson's death, the Trust
estate is to be divided
I will begin
discussing the Trusts set up
for his children
and his mother
in the next
Click here to link to the complete copy of Michael Jackson's
revocable living trust, posted on South Florida Estate Planning.
Florida Estate Planning Law for more commentary from Florida estate
planning attorney David Shulman.
Have a link for the next post ?