Robin Williams: A Life Well-Lived and an Estate Well-Planned

Q. I read your special report on “Estate Planning Mistakes of Celebrities,” demonstrating why probate is such a nightmare and lessons that can be learned from the costly mistakes of celebrities.  I appreciate all the advice on “what not to do” when it comes to estate planning. Are there any celebrities that offer examples of “what to do?”  From what I’ve read in the media, it seems as though Robin Williams actually did some pretty good estate planning. Is this accurate?

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A. While nothing can make the horrific loss of Robin Williams better for his family, friends, and legions of fans, at least Mr. Williams appears to have taken the proper steps with his estate planning, unlike the other celebrities mentioned in our Special Report:

  • Amy Winehouse didn’t have an Estate Plan, leaving behind a $6.7 million estate;
  • Whitney Houston didn’t have a Living Trust and her Will was filed publicly in probate court;
  • Michael Crichton didn’t update his estate plans, leaving his wife and baby empty-handed;
  • Etta James didn’t have a Durable General Power of Attorney, causing a father/son feud in court;
  • James Gandolfini left his heirs $70 million and a hefty tax bill;
  • Philip Michael Hoffman hadn’t updated his estate plan in 10 years, leaving his companion $35 million and a hefty tax bill, and his young daughters empty-handed.

Robin Williams, survived by his third wife, Susan Schneider, and three adult children from his prior two marriages — Zak (31), Zelda (25), and Cody (22) — carefully created trust funds for his children in order to avoid probate, protect his family’s privacy (as best as he could), and save his family a lot in taxes.

When it comes to his children, Robin Williams was very careful with the money he left them, hoping they would not waste it away as so many young people do when receiving a large sum of money. Around the time of his divorce from his second wife, Marsha Garces, he set up a trust that reportedly named his three children as beneficiaries, splitting their trust funds into three equal shares. Each child will purportedly receive 1/3 of his or her trust at the age of 21, 1/2 of the balance at 25, and the remaining balance at age 30. Since Robin’s oldest child, Zak, is now 31, he already has full access to his entire trust. His daughter, Zelda, will receive her final amount in five years, and his youngest son, Cody, has only received his first 1/3.

In terms of Williams’ real estate, there are reports that he left behind a 653 acre Napa Valley mansion that has been on the market since April for $29.9 million and a 6,500-square-foot waterfront home in Tiburon, California, valued at roughly $6 million. Both of these valuable pieces of real estate are reportedly held in some type of sophisticated trust used to remove these homes from his taxable estate. Details about the exact types of trusts used are of course not public record, because trusts are private instruments that generally do not have to be recorded with any governmental entity, unlike Wills which have to be admitted to probate and are completely public.

While few people will need the sophisticated type of estate planning that Williams used, a Revocable Living Trust can help anyone who wants to help their loved ones avoid the pain, cost, stress, and publicity of probate.  No matter how modest your estate might be, having the right documents in place, and your financial house in order, can make a huge difference to your heirs if something happens to you. Because of his foresight, Robin Williams’ family can focus on grieving and not have to worry about unnecessary complications with his estate.

Is a Revocable Living Trust right for you?

  • As with a Will, Revocable trusts can give you flexibility in making changes to your estate plan as needed. Given that Williams was married three times and had children from different marriages, making sure that his estate planning was rock solid in the face of changing circumstances was particularly important.
  • Revocable trusts also give you the ability to control how and when your loved ones will receive your assets. For instance, as Williams did, parents can arrange to have money held in trust until children reach certain ages or “maturity milestones,” such as graduation from college, getting married, purchasing a first home, etc. These provisions allow trusted advisers to act as trustee and handle financial matters during the early part of children’s lives, while ensuring that the children don’t squander their inheritance quickly and find themselves with regrets later in life.
  • A Revocable Living Trust provides the best way to bypass probate because the Trust owns the property the day it is transferred to the Trust, and Trusts don’t die. Therefore, upon your death, the ownership in the property simply passes via the terms of the Trust, rendering probate unnecessary.
  • Probate makes all of your affairs public knowledge. With a Revocable Living Trust, at your death, the trust assets may be quickly distributed according to the terms of the trust, without the delay, fees, and public exposure of probate.
  • Probate is also a process by which creditors of a decedent file claims to collect their debts, and probate assets are typically left outright by a Will to the beneficiaries of the Will, exposing those assets to a lifetime of creditor attack. You can set up your Revocable Living Trust so that upon your death, the trust assets will be protected from creditors of your children.
  • If you have children that are not children of your spouse, a Trust is typically the only way to properly protect both your children and your new spouse.
  • If you have children or grandchildren with special needs, a Trust can easily be customized to meet those needs, without requiring a lifetime of probate filings.

Keep in mind that a Revocable Living Trust does always not eliminate the need for a Will. A Pour-Over Will is still important to pass on any assets you have not transferred to the trust.

The type of trust that makes the most sense for your family depends on the specifics of your particular family situation. Call The Fairfax and Fredericksburg Estate Planning Law Firm of Evan H. Farr, P.C. at 703-691-1888 in Fairfax or 540-479-1435 in Fredericksburg to make an appointment for a no-cost consultation to discuss strategies to fit your family’s situation.

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