The death of famous actor Paul Walker in November of last year was a tragedy that left fans of his movies devastated. While there are often many lessons that can be learned from tragedies such as this, an important but possibly overlooked lesson includes how the deceased person’s estate is handled. It’s safe to say that Walker had more assets than the average person in Colorado — he was worth around $25 million including the real estate he owned, which was worth around $8.5 million. Nevertheless, the setup of Walker’s estate may provide some insight and useful estate planning lessons to people with much fewer assets, especially with regards to trusts.
Walker’s daughter is the sole beneficiary of a revocable living trust that the actor established for her. Walker’s will is known as a “pour-over” that passes all of his assets into this trust. By establishing this trust, Walker left a clearly-defined process for the handling of his assets, as opposed to just having a will. Had the actor only had a will, the probate process might have become more complicated and challenging.
Unlike a will, a trust is a private document. Therefore, it is not known exactly how Walker’s daughter will be receiving her millions. It’s possible that she might receive the inheritance in incremental amounts over time, instead of getting a lump sum when she reaches the age of 18. An incremental payout is typically thought to be beneficial for young adults.
Another good strategy that Walker employed involved setting up a guardian for his daughter. The actor’s will nominated his mother, the child’s grandmother, to act as caretaker and guardian of the money. The grandmother will not assume guardianship duties unless the girl’s mother is determined to be unfit by the courts, however. The mother may also agree to simply have the grandmother take custody of the child, but it’s not known if the mother has reason to do that.
Establishing a trust and guardianship for his daughter were two great strategies that Walker employed. Many people in Walker’s age group might not have planned that far in advance. Colorado residents might want to look into these estate planning tools, regardless of their age.
Source: forbes.com, “Five Estate Planning Lessons From The Paul Walker Estate” Danielle and Andy Mayoras, Feb. 10, 2014