There have been so many sad and completely avoidable celebrity estate planning disasters: Aretha Franklin; Prince; Amy Winehouse; and Sonny Bono that I thought it would be a good idea to spotlight a celebrity who created a successful estate plan that kept his estate details private.
Smokey and the Bandit - a celebrity estate planning success!
Burt Reynolds died recently at the age of eighty-two. Based on the will filed with the court in his county of residence, Mr. Reynolds was smart and thoughtful enough to create an estate plan that protected his family and his privacy. How did he do this? By creating a trust during his lifetime for his beneficiaries. We know of the trust's existence because his will refers to it. The will leaves all of his property to the trust and appears to be what's known as a "pour-over" will. The many headlines stating his son was left out of his will are somewhat misleading; Burt Reynolds did not disinherit his son. Pour-over wills frequently contain only one beneficiary - a trust. His son may still be a beneficiary of the trust.
How is it possible to know what a celebrity's will states?
Wills are public documents.The general rule is - all wills must be filed with the court when someone dies. That's how we know about Burt Reynolds' will. But Burt Reynolds' will is likely just the tip of the iceberg of his estate plan. When you don't have a trust, your will governs the distribution of your real and personal probate property. This is probably the majority of your estate. But when someone creates a trust and transfers property into the trust before death, the trust agreement governs all the property inside the trust. A will by the creator of the trust only governs what is left outside of the trust. The key to successful trust planning is to get all property that would otherwise be probate property into the trust so little to no property has to go through the probate court.
What is a pour-over will and why is it necessary?
Sometimes people with trusts die before transferring all of their property into the trust. Maybe the decedent just bought or inherited property and did not have time to transfer it into the trust before dying.A pour-over will is designed to solve this problem. At death, the pour-over will captures any probate assets accidently left outside of a trust and "pours" them into the trust created by the testator during his or her lifetime. The property then flows to the beneficiaries listed in the trust outside of the prying eyes of the public. The existence of a pour-over will does not mean there are assets left outside the trust. Pour-over wills are frequently just an added layer of protection for trusts. Therefore, it remains to be seen whether Burt Reynolds had any probate assets outside his trust. The majority of his assets should already be in the trust.
For more information on how you can use a living trust in your estate plan, give us a call at 704.887.5242 or fill out the contact form.