Estate Planning Lessons from Michael Jackson

Let’s face it, Michael Jackson had a spotty record when it came to managing his money. Sure, he earned a gazillion dollars making music and was savvy enough to buy rights to Beatles’ tunes, but in his latter days he also spent lavishly, millions more than his annual income, and he racked up a sizeable debt. In other words, you wouldn’t want him as your financial advisor.

But Kiplinger points out that for all his quirks (including those not money related), Jackson made one very smart move: he had a proper estate plan in place, one that will not only transition his assets efficiently but also keep most of his financial dealings out of the press.

What can we learn from Jackson in this regard? Here are four lessons Kiplinger highlights:

1. Write a will.
2. Consider a living trust.
3. Name a guardian.
4. Assemble a good team.

If nothing else, Jackson’s last money move serves to remind us all that we need to get at least the basics of estate planning in place by having a will. And as we’ve also seen from his life, this planning becomes all the more important when children are involved.

4 Estate-Planning Lessons From Michael Jackson [Kiplinger]

(Photo: frankieleon)


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  1. sir_pantsalot says:

    What should it cost to have a will written up? We had someone from our insurance company help us plan our will for free. They went over all the assets, personal items and who should watch over the kids. All of the real work was done. Then we went to a layer to have the official will written and the guy charged $600.

    • CubFx says:

      @sir_pantsalot: My attorney charged me $500.00 to write what he called a “mom and pop” will. Basically, two wills, one for my partner and one for myself leaving almost everything to the other. He also included living wills, medical powers of attorney, durable powers of attorney, and a couple of other essentials required by those of us who cannot marry.

      • NeverLetMeDown says:


        That’s not spectacularly high for someone with kids, who will need terms of guardianship, etc.

        For people with really simple wills (i.e. single folks or married couples with no kids who plan to leave everything to the other partner), something like Willmaker will do just fine, and cost about $50.

        A lawyer would be preferred, but if the choice is between having a Willmaker will for $50 and not having a will, then Willmaker is clearly the path to take.

        • Eyebrows McGee (now with double the baby!) says:

          @NeverLetMeDown: Things like Willmaker are not necessarily legal in all states. Even if they say so on the box. (My local Office Box Store sells an “Illinois Will Kit” that is clearly not legal in Illinois.)

          I’m not particularly anti DIY wills for people without kids, but there are so many BAD products out there it can be hard to find a good one.

          A better solution would be for the state to pass a law for a “short form DIY will” of some sort; many states already have these for health care powers of attorney, regular powers of attorney, mental health treatment declarations, etc. You literally copy and paste the document from the statute itself and fill in the blanks, using only the statutory language. It’s limited, but it often does the job for, say, 30% of people, and you can be assured that as long as you’re sure it fits your circumstances and you don’t screw with the statutory language, the court will take it. That’d be a much better solution for DIY wills than these terrifying kits.

        • EarlNowak says:

          @NeverLetMeDown: Cost of willmaker: $50
          Cost your estate will pay for an attorney when the will is challenged in court: $5000.

          Being Penny Wise and Pound Foolish: Priceless.

          (In my state, a will kit can be okay but if it’s not executed properly (just signed by the testator) then all the printed stuff on the form is IGNORED. You have to be able to tell it’s a will just from the handwritten portions. If you can’t, then it’s not valid. A not surprising amount of litigation arises from this rule.)

    • Eyebrows McGee (now with double the baby!) says:

      @sir_pantsalot: “They went over all the assets, personal items and who should watch over the kids. All of the real work was done.”

      All of the real work FOR YOU was done … the real work for the lawyer is in the drafting. That’s the part that takes the longest whether clients e-mail me all their preferences all perfectly delineated with all information I need, or whether we sit down and discuss it.

      $600 would be a little high for my market, but very inexpensive for other markets.

    • outoftheblew says:

      @sir_pantsalot: We paid about $300 to an attorney for our wills, but have no kids and had already paid quite a bit to have other legal documents drawn up at the same time.

  2. Applekid ┬──┬ ノ( ゜-゜ノ) says:

    I, Arthur Durham Muldoon, being of sound mind and body do hereby divide up my considerable estate as follows. To my overly emotional sister, Jenny, who grubbed with her husband, Hank, grubbed for everything they could get from me, and then cried crocodile tears when I needed sympathy…

    … To Jenny, I leave a boot to the head…
    … and another boot to her wimpy husband, Hank.

  3. Eyebrows McGee (now with double the baby!) says:

    I would like to bitch about living trusts. Shady lawyers push these because they take a lot longer to draft (earning the lawyer more money) and then someone (like the lawyer!) has to administer the trust for years on end, earning money for that. They are also often pushed as tax avoidance scams, which will earn you a nice visit from the IRS and potentially federal PMITA prison time.

    They CAN be useful — as Kiplinger notes, to keep assets out of the public view. But this: “Avoiding probate can also make sense for regular folks with significant assets or property in more than one state because it spares their heirs the aggravation of a prolonged legal process. “It saves a lot of money, time and hassle,” says David Shulman, an estate-planning attorney in Fort Lauderdale, Fla.” is only limitedly true.

    That’s ABSOLUTELY true in Florida, which has a long, slow probate process (partly because it’s God’s waiting room) but where I am, probate is pretty inexpensive and probate and living trusts take about the same amount of time to get settled, but the living trust will cost more to set up, maintain, and often more to settle. (In my jurisdiction (and in most, I’d think), a reasonably simple will can be probated by anyone who’s detail-oriented enough to file their own 1040 long form. It’s a lot of tedious accounting and careful checking, but it can be done by a layperson easily, and the court here is helpful to laypeople doing it. But a living trust will be more likely to require a lawyer.)

    All of which is to say, if late-night TV lawyer man told you you need a living trust, but your personal attorney says you don’t, FOR THE LOVE OF GOD DON’T KEEP DEMANDING ONE.

    I have had clients for whom they were appropriate due to the complexity of the estate. But I’ve had a lot more clients who had heard about them on TV or from a tax scammer and just kept demanding them no matter how many times I told them they didn’t need them and it would cost them a lot of money. (Or that I wouldn’t do it because I’m not down with scamming the IRS.)

    (It’s sort-of like the people who want pre-nups who have NO EARTHLY NEED FOR A PRE-NUP but completely refuse to believe you because BY GOD it’s part of their dream wedding!)

    • EarlNowak says:

      @Eyebrows McGee (now with more baby!): Well now, forgive me for asking, but under what situation would a couple have absolutely no need for a prenup?

      • Eyebrows McGee (now with double the baby!) says:

        @EarlNowak: It will obviously depend on your jurisdiction. Where I am, when neither party enters the marriage with significant assets, there are no pre-existing children, no prior marriages, and no expected family interhitances or family businesses, it’s just useless paper. They typically want me to write EXACTLY WHAT THE LAW SAYS WILL HAPPEN IN CASE THEY DIVORCE. It’s like, “Well, congrats on spending $900 to have me copy down Illinois law for you. I’m pretty sure the Xerox is cheaper.” And lots of times people are trying to use a prenup to do things they need to do with various financial instruments instead, and the prenup isn’t going to work the way they want it to work. (And if they do it with the financial instruments, they won’t need the prenup.)

        Those just annoy me. The ones that make me crazy — and that I obviously refuse to do — are the clients who want me to draft prenup provisions that are unenforceable under state law. The most popular one (which makes me think they’re bad people generally) are the ones who want to draft that when they have kids, Spouse A will have no responsibility to support them in the case of a divorce and will never have to see them again (typically because Spouse B wants kids, Spouse A isn’t hot on the idea, and this is their “compromise.”). You can refuse to pay child support all you want, and you can put it in a pretty document if it makes you happy, but the state is still coming after your deadbeat ass. (And more generally, you can’t make dispositions as to children in a prenup, because the courts will always consider the child’s best interest, regardless of what you put in a prenup or even in a will. If the guardian you named for your kid in the will has become a crack whore, the court is picking someone else.)

        At some point the idea got out in the pop culture that “pre-nups are what responsible couples do,” rather than “pre-nups are a good tool for couples in certain specific situations.” And for some people, it’s seriously part of their whole Big Princess Day Wedding Scheme and they therefore refuse to listen to reason because it’s not actually a legal document to them; it’s part of the idealized, fetishized Wedding Process. And generally all the terms they want to put in sound like they came from a soap opera. You tell them it’s not enforceable and they totally don’t care, because the enforceability doesn’t matter; they just NEED the document because it’s part of their dream wedding.

        • EarlNowak says:

          @Eyebrows McGee (now with more baby!): Okay, fair enough. But let me caveat your post- if you lived in a community property state that allows a couple to opt-out of a community regime by way of a pre nuptial matrimonial contract, that might increase the number of prenups your recommend significantly.

          @thesadtomato: Of course, neither you nor anyone else expects their marriage to end in divorce.

          But your lawyer does. It’s not his job to be romantic, it’s his job to protect your interests.

          • Eyebrows McGee (now with double the baby!) says:

            @EarlNowak: “if you lived in a community property state that allows a couple to opt-out “

            Yup. But I don’t. :)

      • thesadtomato says:

        @EarlNowak: I don’t mean to sound dumb, but I don’t have any money, my husband doesn’t either, and we don’t plan on getting a divorce. Why would we need a pre-nup? I know no one *plans* on getting a divorce, but how can you go into a marriage you’re not expecting to end with a pre-nup?

        • Eyebrows McGee (now with double the baby!) says:

          @thesadtomato: Typically if one partner enters with significant assets, especially if there are children from a prior relationship or significant family assets (heirlooms, business) involved, a prenup can be a smart idea. In case there is a divorce, it delineates that at the beginning of the marriage, both parties understood those assets were NOT to be marital property but would remain outside the marriage (and then you must diligently refrain from co-mingling them).

          Some of these things can be accomplished in other ways — various financial instruments or business contracts, for example — but it’ll depend on the situation.

          It may also be a way for children of a prior marriage to feel more comfortable with a remarriage, especially if their parent has significant assets and they’re afraid of gold-diggers. (I’ve also seen pre-nups that are drafted, like, “After 15 years all property will become marital property” or whatever … if the marriage goes the distance, the prenup will expire.)

          But yeah, I personally wouldn’t be particularly interested in entering a first marriage with a prenup. I’d at least be open to it if, say, I were a widow remarrying and had children from my first marriage (or he did), but I would have balked big time if my husband had suggested a prenup.

          I do have one friend who entered her marriage young, poor, and with a prenup, because her parents own a significantly-sized business and were planning on making her a partner in it some years later, but because of various state law and business structure issues, were unwilling to do so unless they knew her partnership would be completely protected in case of a divorce. That made sense. (And now they’ve been happily married 10 years, he ended up working in her family business, and her parents are planning on making HIM a partner too.)

          Interestingly, in some pre-marital counseling systems, a pre-nup is a red flag that means more counseling is indicated, at least to investigate whether the pre-nup is an “escape hatch” suggesting this is a starter marriage or temporary marriage.

        • EarlNowak says:

          @thesadtomato: I just realized how cold my last post was.

          Let me provide an example. If you and your husband lived in my state then a prenup opting out of community property would protect each spouse from the others creditors. So if your husband got a terminal disease and you didn’t have insurance, only his income and assets would be subject to claims of creditors, your income and assets purchased with your income would be protected.

          If you hadn’t opted out of community (ie, without a prenup), then you’d probably be forced into bankruptcy, because debts for the benefit of the other spouse are executable against community property.

          • GuinevereRucker says:

            @EarlNowak: I think the idea of a pre-nup is horrible. When you get married, you’re making a solemn oath to stay with and love a person for the rest of their lives. But you selfishly provide yourself with a financial way out, you know, just in case. Marriage insurance, that’s what it is.

            I’ve been married eight years, and while I don’t know everything, I can tell you that a stupid agreement like that would make divorce MORE likely – when things get tough, it makes it that much easier to get out rather than sticking to your oath.

            • morlo says:

              @GuinevereRucker: Non-refundable dowries and the threat of acid is the glue that keeps marriage together.

            • Prole says:

              @GuinevereRucker: I think that’s the unspoken focus of the comments here. However, the caveat is that there are situations where a pre-nup makes sense.

              @Eyebrows McGee (now with more baby!): I’ve never heard of a pre-nup as part of a dream wedding scenario. I don’t understand it. As you mentioned that it’s usually a copy and paste of state law, does that mean they’re just promising to split their assets in the event of a divorce? You’ve explained this very well in regards to why it is not a good idea. I wish I understood the people who would desire to spend money to do this.

              • Eyebrows McGee (now with double the baby!) says:

                @Prole: If I understood their motivations, I probably could talk sense into them faster. :) I think it’s that they see it on TV and have decided that it’s just “what people do.” It’s typically people who have a certain level of sophistication (enough to be aware of, oh, joint bank accounts and that they might need to change deeds when they marry and things like that) but not enough sophistication to manage their business dealings, finances, or legal needs without a LOT of help and explanation.

            • EarlNowak says:

              @GuinevereRucker: But it’s not all about divorce. As I said above, you can protect yourself from creditors.

              Even if you stay married until death, if health care costs for your spouse ends up siphoning off all your assets, you’ll be left grieving and bankrupt- where a prenup could have protected your marital assets if you had opted out of community property.

              @Eyebrows McGee (now with more baby!): Yes, but I do. Options and reasons vary from state to state, and your prenup discussion is only valid in the state in which you practice.

              • erratapage says:

                @EarlNowak: In my jurisdiction, prenups are often used to protect inheritances from divorces. They are used extensively when parents of the couple have a family business or a family farm.

                Living trusts (again in my jurisdiction), are not a bankroll for an attorney. They do take a little more time to draft, but we seldom administer them for our clients. Moreover, they usually are not administrated by a professional, but rather by the individual or the individual’s financial team.

                In some states, the failure to have a proper estate plan can result in very large probate costs. Here, in Minnesota, the failure will most result in a sacrifice to privacy, ease of transfer, and tax savings.

                • Eyebrows McGee (now with double the baby!) says:

                  @erratapage: I had a client with a living trust drafted in Minnesota that was wildly inappropriate in Illinois and the administrative costs (a bank administered it) were draining the assets. She refused to let it go because her father’s attorney had made it up lo these many years ago and had never steered her wrong. I figured the age of the thing was the culprit, but differences in IL/MN law could also have been the issue; it wasn’t an estate most IL lawyers would suggest a living trust for. It was kind-of sad.

                  (Appropriate living trusts aren’t an attorney bankroll, but we’ve had a couple of sleazy attorneys exploiting clients with them and many clients I get who ASK for one heard about it from one of those guys. That’s why I, personally, hate it when clients ask for them. But I should have been more clear that they aren’t necessarily bad. I’ve also had multiple, “But I heard if I get a living trust I don’t have to pay income taxes!”)

            • gaywolverine says:

              @GuinevereRucker: And what happens when your SPOUSE cheats or decides they want out? You may not have the choice, and being blind and stupid wont help you. Being stupid is ore likely to mean the state has to support your ass because you failed to put protections in writing

          • thesadtomato says:

            @EarlNowak: No it wasn’t cold, it was what I meant when I said no one plans for divorce; that’s the lawyer’s line, exactly. There are situations, like the ones you and eyebrows mentioned where a prenup might be appropriate, but there are also ones where a couple would have absolutely no need for a prenup: No debt to lay on each other, no property, and no illusions that the car my husband bought before we married is “my” car, even if community property says it is. Nor do I live in a state where I can opt out . . .

        • gaywolverine says:

          @thesadtomato: You dont expect to die either but it does not change needing a will. I would also point out that a will should be made for the possibility you may die together (plane or car accident, home fire etc) Saying you want you shit to go to each other does you no good if the other is already dead. A will should be looked at at least yearly.
          As for a prenup, there are very few cases where one party does not have a significant difference in either income or assets. This could be from a parent or other relative as well. They do not have to be complicated, but planning for divorce is like planning for losing your job. You may not want to do it, but you are foolish if you dont. It also brings any “issues” out in the open (past bankruptcies, liens, possible law suits, or credit issues)

    • mrgenius says:

      @Eyebrows McGee (now with more baby!): Avoiding probate is not a small consideration for many people. One partner of a gay couple I was friends with passed away with a will and no trust. His will stated he wanted the vast majority of his assets to pass to his partner (no gay marriage here). It was very clear. However, certain family members contested the will and it lead to a very nasty, drawn out process that left the partner without much for a long period of time. A living trust would have prevented all of that mess. Plus, wills are public knowledge and many folks don’t want their or their relatives’ business out there for the world to see.

  4. Nytmare says:

    In my state at least, the default inheritance laws pretty much match what most people would do in a simple will anyway — so is there any advantage to buying a will when the assets are going to end up in the same place either way?

    • EarlNowak says:

      @nytmare: Guardianship of kids, putting assets into trust for minor children, avoiding estate tax, and general financial planning.

      Let me make an example. I have federal student loans that I’m paying off from college. If (god forbid) my parents die without a will, me and my sister will inherit their property in equal shares. If I then die, my student loan company will loot and pillage my estate to get their $100,000 back, and whatever is left over will pass to my sister.

      If my parents have a will and put half their assets into a “Spendthrift Trust” (a trust which creditors are not allowed to access) for my benefit, with my sister as a remainder beneficiary, then when I die my student loan company can only access my own possession, they can’t get to any property or cash that I inherited in trust, and the entire amount of my inheritance will pass to my sister.

      By having an estate plan, my parents just transferred somewhere around a hundred grand from my student loan company to their daughter. Who do you think they’d want to benefit?

      • morlo says:

        @EarlNowak: The loan company is hardly “looting” anything by trying to recover the money they gave to you. From beyond the grave you will be causing students to have higher rates, but will be unable to control what your sister does with the money

        • EarlNowak says:

          @morlo: I would assume that the risk of my death has packaged into my own loan rate. If their valuation of the risk was incorrect then yes, rates may go up. But it’s their own fault for not managing risk (either by setting a rate which covers the risk of death, or by taking out a blanket life insurance policy on debtors), not my fault for dying.

          Or, let’s put it this way- I don’t plan on being hit by a bus to screw over sallie mae.

          Further, I’m not surprising them with the fact that (like most unsecured loans) any amount in excess of my net worth at death will be unrecoverable. When I took out the loan they didn’t ask about any assets I may receive in the future, or my expected income. I didn’t deceive them in any way about my ability to repay.

        • silver-bolt says:

          @morlo: Death rates and no-pays because of death are already factored into loan rates. If you owe 100k in student loans and die, I highly doubt they expect to recover even a significant portion of it from your estate.

    • Eyebrows McGee (now with double the baby!) says:

      @nytmare: Yes if you have children, so that you can name guardians and trustees. If you don’t have kids, your assets are small, and you’re down with what the state does for intestate people, you’re probably fine. (I have had clients who estate-planned because they had pets, which is also a legitimate choice. Fun fact: clients are way more likely to cry when you ask them what they want to do with their pets if they die than when you ask them about their kids. I think because they’ve emotionally worked up to thinking about their kids but the pets come as a surprise. Men also cry significantly more often than women do when discussing pets.)

      I write wills for a living and my husband and I didn’t bother with one until we had a kid (and it’s, uh, still waiting to be executed, but I guess you can have six weeks grace upon becoming parents), because we were fine with the intestacy rules and didn’t really have enough estate that anybody would care.

      (Also, re: estate tax: in many states that threshhold is SO high, and the spousal exclusion SO generous, that you’ll be estate planning for financial purposes long before you start worrying about estate tax.)

    • gaywolverine says:

      @nytmare: Where do you want your assets to go if you die together?

  5. Bradley Schwarzenbach says:

    Attorney Kristina Vickstrom wrote a great post about this too on her blawg: []

    If you don’t want details of your estate revealed after your passing, apparently a Will just won’t do.

  6. Eyebrows McGee (now with double the baby!) says:

    On guardians:

    Many lawyers recommend that you appoint two people for your kids — a physical guardian who will raise them, and a financial trustee to manage their money (typically your estate has been dumped into a trust) until they’re of age. The reason for this is that even little kids get savvy quick about saying, “But Aunt Mary, I’m an orphan! Only a pony can make me feel better! You’re so mean!” And then Mary can say, “Boy, I’d love to get you a pony, but Aunt Stacy manages your money and she won’t let us do that.” Or, more to the point, teenagers know it’s THEIR money and during the battles of the teenaged years, introduce it as ammo in totally unrelated arguments. Have a separate trustee lets the guardian focus on parenting the child without the second, very emotional issue of money entering into it. (Emotional for the child who wants freedom and knows the money to buy it is just out of reach, and emotional for the guardian who’s trying to make good parenting decisions and wondering if the child should have item X or experience Y or whatever.)

    And then, of course, you have two trusted adults watch your kid AND each other, which reduces the chance for problems. (And you may, of course, have a guardian who’s a GREAT parent, but rotten with money. Absolutely have that person raise your kid, and leave the money matters to a family lawyer or an accountant relative or whatever.)

    I always give my clients this option and rationale, but I don’t insist on it; they know their families best. If I left my son to my parents, I’d know they would take no guff from him about “but it’s myyyyyyy money and I want a pony!” and it wouldn’t be a problem for them to deal with. My siblings, though, have never been parents and I think would be more likely to give in, so I’d be more likely to name one the physical guardian and one the financial trustee.

  7. Trencher93 says:

    NEVER skimp on a will! Have a good lawyer who knows your local laws and state laws VERY well. $600 sounds fair for a good lawyer to do a reasonably complex will. Do not use Internet, software package, “free” etc wills. When someone goes to probate a will, the people can be very, very, very picky. One little glitch and the will is invalid.

  8. moore850 says:

    you forgot:
    0. sell 700 million albums so that you have an estate to divide up.

  9. morlo says:

    If MJ had written a will, his kids would have been raised by chimpanzees in a hyperbaric chamber, and his fortune would have been given to a foundation to provide depigmentation and hormonal anti-aging therapies to children.

  10. falc says:

    also, don’t forget about an ‘Advance Directive for Health Care’
    have your wishes known about what should happen in one of those tragic times where you could be a vegetable… learn your lesson from the Terry Schiavo debacle!

    get that done with your Will.

  11. silver-bolt says:

    As for probate and picking apart a will, can’t a will be written with a “If any part of this will is invalid by law, the rest will still be valid.” so nitpicking a single point won’t invalidate the rest, solid points.