Estate Planning: What Michael Jackson got right
by Michael Sears
You don't need a celebrity-size estate to realize the benefits of proper planning.
Celebrity estate plans typically provide multitudes of ex-amples of what not to do. Heath Ledger’s death revealed an out-of-date will that failed to provide for his infant daughter. Locally, many remember the local news broadcasting people picking through personal items at Derrick Thomas’s estate sale. While celebrity mistakes seem to be the norm, occasionally we can learn from planning that was done well—and sometimes from an unlikely source. Despite the financial struggles and bizarre lifestyle of Michael Jackson, it appears that the King
of Pop got his estate plan right.
Using a Trust to Provide Privacy. During his life, Michael Jackson created the Michael Jackson Family Trust. This trust provides for the distribution of Jackson’s estate, the exact terms of which have been kept private. Unlike a Last Will and Testament, which must be filed with the probate court and becomes open to the public, a revoc-
able trust allows an estate to be administered privately, by trustees you select.
When a trust is created, assets must be re-titled, or “funded,” into the trust for the terms of the trust to control those assets. Failure to fund the trust may result in an un-necessary probate procedure, or may cause assets to be distributed outside of the terms of the trust. Not funding the trust may also prevent a carefully designed tax plan
from working. It appears that Jackson’s trust was funded, shielding the public from the exact nature and value of his estate.
Keeping Things Up to Date
In contrast to Anna Nicole Smith’s will, which had not been updated to address the birth of her daughter or death of her son, Jackson’s specifically mentioned his three children, and specifically excluded his ex-wife. It had been updated only five months after the birth of Jackson’s youngest child.
Simply having estate-planning documents is not enough, and may create a false sense of security. Changes in the law or your personal and financial situation can cause the best plan to become outdated. An estate plan, like a financial plan, should be reviewed regularly, and adjusted from time to time to ensure it meets your goals.
Use Professional Advisors
While it has been reported that Jackson left as much as $500 million in debts, his estate is thought to include an interest in a music publishing catalog valued at up to $750 million. This catalog, as well Jackson’s own music and likeness, will continue to generate millions of dollars for the estate in the future.
To handle the challenges that come with managing debts and assets valued in the millions, Jackson named his attorney, John Branca, and a veteran music executive John McClain as executors of his estate (and presumably, trustees of his trust). This seems a wiser choice than appointing a friend or family member, as is often the case.
Choose Executors/Trustees Wisely
The choice of executor and trustee is critical to the estate plan’s success. Even in small estates, the executor and trustee will have to address tax, legal, and investment issues, and may have to work to protect family harmony.
A family member serving as trustee may encounter stress due to the time required to serve, the work involved, and the demands of other family members who may have unrealistic expectations of how the estate or trust should be administered. A professional or corporate trustee can bring knowledge, experience, and objectivity to the situation that a friend or family member may not.
Don’t Procrastinate; Have a Plan
It is yet to be determined exactly how Michael Jackson’s estate will turn out. Already there have been family squabbles and court involvement, and with a family this unique, and an estate this large, there is bound to be more
to come. But imagine the battle for control of this estate had no planning been done.
Unexpected death and disability happen to people everyday—Jackson was only 50. With no estate plan, or one that is out of date, a bad situation is made worse. You don’t need a cel-ebrity-sized estate to be concerned about planning issues. If you have an estate plan, make sure it is up to date. If you do not have a plan, contact an estate planning attorney to help you get one set up. 
Michael K. Sears is vice president/trust officer for Great Plains Trust Co. in Overland Park, Kan.
P | 913.647.1289
E | Mike@Greatplainstrust.com