Celebrity Estate Planning Lessons: Paul Walker
This month Forbes published a great article on Five Estate Planning Lessons From the Paul Walker Estate. Paul Walker died in a car accident on November 30, 2013. His last will was prepared in 2001, the same year as the release of the first movie in the Fast and the Furious franchise. He left behind a 15-year old daughter and an estate worth an estimated $25 million. The Forbes article explains the lessons well, but I wanted to expand on a couple of them.
First, kudos to Paul Walker for having an estate plan. Forbes listed this as lesson #4, but I think this is one of the most important takeaways from this tragic incident. He was 40 years old and in good health when he unexpectedly died. If he had procrastinated, or believed that estate planning was something that should be done later in life, it would have been too late. Mr. Walker gets extra credit because he prepared an estate plan in 2001 when he was only 28 years old. A 2011 study found that only 8% of Americans under the age of 35 have a last will, and that over 50% of Americans of all ages do not have a last will.
Second, Paul Walker left his assets in trust. One advantage of leaving assets in trust is that the deceased can dictate the terms under which the beneficiaries receive such assets. Many people do this to ensure their children won’t irresponsibly manage their inheritance if a parent dies when the children are still young. For example, the trust may state that one’s children may receive reasonable amounts from the trust for their health, maintenance, support, and education, and then the children may withdraw amounts from the trust at certain ages (for example, 1/3 of the trust at age 25, 1/3 at age 30, and the balance at age 35). We don’t know the terms of Mr. Walker’s trust because it’s not public record, however, imagine the alternative: his will could have left the remainder of his estate outright to his daughter. The result would have been that his daughter would inherit what was left of the $25 million after taxes and expenses on her 18th birthday. Working with a qualified estate planning attorney is immensely helpful in situations such as this as the attorney will assist you in tailoring a plan according to your circumstances and wishes.
Bottom line: don’t procrastinate, because you never know what life has in store.