One additional benefit of the trust, according to estate planning attorney Mark Bischoff of Chicago, is that it gives an added degree of protection from creditors. While he does not know the specifics of the Michael Jackson Family Trust, and the protection would also depend on the state law where the trust was created and administered, Bischoff says: "Attacking a trust may be problematic for Mr. Jackson's creditors. If he incurred his reputed substantial debt as an individual, but maintained most of his assets within his living trust, after his death the creditors may not be able to reach those assets. Additionally, the timing of placing the assets in the trust will be important in determining whether they are protected from creditors."
Jackson is reported to have completely lost his interest in Neverland Ranch after the note was purchased from his lenders. And some of his assets may have been liened by creditors before his death. Those will be fair game. But it's also possible that royalties will flow into this trust as a result of income earned after his death.
Bischoff specializes in not only creating these trusts as part of estate plans, but in litigating estate and trust disputes. He says: "Many clients put a 'no-contest' clause in the trust, so that if an individual contests the trust, that individual will lose any benefits from the trust." That portion of the law is still evolving, he notes. But adds that disputing the terms of a trust is more complex than contesting the actual will, because of the privacy afforded by living trusts.
And all of that brings us back to the importance of having an estate plan. Simply having assets in joint tenancy isn't the answer -- especially if one owner is incapacitated, or if both die in an accident. In that case, state law would make decisions about distribution of your assets, and custody of your children.
A simple will can take time to go through probate and incur costly legal fees. That's why it's important to create a revocable living trust as part of your "estate plan." In it you can name a successor trustee to act on your instructions if you die, or are unable to handle your finances. Having such a trust will keep your assets, and your instructions, private. Then you must re-title your major assets in the name of the trust, which is a simple process.
A well-done plan can save both money, time and public exposure. In fact, his well-done estate plan may be the only privacy Michael Jackson had in life, or in death. And that's The Savage Truth.