The Standard Celebrity Estate Plan (Revocable Living Trust)
Robin Williams died of an apparent suicide on August 11, 2014 at the age of 63. As talented as Williams was, his personal life was at times messy. Williams was married three times and had three kids from two different mothers. Williams’ net worth at the time of his death was estimated to be between $50 and $130 Million.
Despite William’s celebrity status, we know relatively little about how his estate was dispersed because he utilized a revocable living trust as his tool for distributing his estate. A revocable living trust is a trust that is set up during the grantor’s life. The trust is funded with all of the grantor’s assets, such as bank accounts, real estate, automobiles, and stocks and bonds. Whereas a Last Will and Testament must go through a public probate process, a revocable living trust is a private arrangement that avoids probate.
In California, where Williams lived, the probate process is notoriously long and arduous. Additionally, confidentiality provided by a revocable living trust is attractive for celebrities because it keeps family business out of the public eye. For these reasons, many rich and famous people, such as Robin Williams and Michael Jackson, utilize revocable living trusts to distribute their estates.
In Texas, Last Will and Testaments work best for the vast majority of families. For most estates, the probate process takes 3-4 months to complete and costs about $3,000. Additionally, revocable living trusts require significantly more effort to set up and maintain compared to Wills. All of the assets of the grantor must be transferred into the revocable living trust; if anything is missed, the decedent’s estate will go through probate anyway.
Despite these disadvantages, there are certain cases that a revocable living trust makes sense even in Texas:
When the grantor has property outside the state of Texas --> Probate applies where real property is located. If you have property in multiple states, or property in states where the probate system is not efficient, a revocable living trust should be considered.
When confidentiality is important --> Revocable living trusts are confidential. If you do not want your estate plan to be public upon your death, you should consider a revocable living trust.
When the grantor has complicated assets (i.e. mineral interests) --> In many cases, the grantor will be in a much better position to maintain the assets than their loved ones. For example, landmen typically will receive mineral interests as compensation for the jobs that they work. Mineral interests are notoriously difficult to transfer upon death. If the landman uses a revocable living trust, they can take care of most of the hard work themself ahead of time.
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