A few weeks ago we tragically lost an entertainer who played a host of memorable roles and provided laughter to many of us and many others as well. Most of the time when I write about celebrities and their estate plans it is to point out something they may have done wrong, but today I am pleased to report that I am able to discuss one who may have done things right. Several reports indicate that Robin Williams may have used a revocable trust as his primary vehicle to transfer his assets at death.
There are a number of reasons a revocable trust may be the perfect estate planning tool, but primary among them is privacy: a revocable trust is a private document that normally will be unavailable to the public, an important consideration for a public figure. In contrast, consider the numerous cases where only a will existed, such as the late Phillip Seymour Hoffman or James Gandolfini, among others, whose wills and dispositions from their large estates were on public display. A will is a public document, filed with the court in a probate proceeding, and as such is available to the public; a trust is not automatically subject to probate or court jurisdiction. If a client-say a celebrity, an athlete, or even a resident of a small town full of nosy neighbors—ever has a need for privacy, the revocable trust is the preferred instrument.
A revocable trust can also reduce (but not eliminate) the possibility of intra-family drama surrounding the estate plan. A revocable trust avoids a probate proceeding, without which no notice to family members and heirs is necessary. Only the named beneficiaries need to get notice of the distribution from a trust, unlike in probate where all defined heirs, along with named beneficiaries, are required to receive notice. This means that a child or someone else who intentionally may have been excluded as a beneficiary will receive notice and will be an interested party in a court-supervised probate proceeding. It is still possible to bring action to determine the validity of a trust, or to contest distributions from a trust, but a party who might wish to press such claims may never even receive notice that the trust exists.
Just because Robin Williams appeared to use a revocable trust instead of a will as his primary estate planning vehicle doesn’t mean his estate plan was perfect, but it does mean he was able to ensure that the division of his assets will remain private. One caveat: revocable trusts are only helpful if you have actually transferred your assets to the trust. In many jurisdictions if you have more than a minimum threshold, say $20,000 in assets titled in your own name, and not in the name a trust or a designated beneficiary or in common ownership with another person, a probate proceeding will be necessary even if a revocable trust exists.
*Randall A. Denha, JD, LL.M., is the Principal and Founder of the law firm of Denha & Associates, PLLC with offices in Birmingham, MI and West Bloomfield, MI. Mr. Denha continues to be recognized as a “Super Lawyer” by Michigan Super Lawyers in the areas of Trusts and Estates; a “Top Lawyer” by D Business Magazine in the areas of Estate Planning and Tax Law; a Five Star Wealth Planning Professional and a New York Times Top Attorney in Michigan. Mr. Denha can be reached at 248-265-4100 or by email at firstname.lastname@example.org