Boston, MA (PRWEB) March 25, 2014
AOL News on Paul Walker’s death: The Last Thing People Saw Before the Crash
It was an ironic, yet heartbreaking tragedy. According to Cinema.com Actor Paul Walker was known to people around the world as Brian O’Conner (1), an undercover agent working from the Los Angeles Police Department and later the FBI, who investigates a street-racing crew that also dabbled in criminality. A central theme of the Fast and the Furious film franchise is O’Conner’s transformation into a reckless character, which mirrors some of his estate planning strategy as shown by facts uncovered by In Re: The Estate of Paul William Walker IV, 1439814, filed in the Superior Court of California, County of Santa Barbara (2).
According to The Guardian, Walker was not behind the wheel of the Porsche Carrera GT that burst into flames and nearly disintegrated on a late November night (3). His financial advisor had been driving the sports car at speeds that rivaled the stunts seen in the Fast and the Furious films. The financial advisor, who was also a race car driver, did not survive the fiery crash.
Keeping assets in a revocable trust effectively makes them personal and subject to federal estate taxes. Depositing those assets in an irrevocable trust can completely eliminate the estate tax burden.
Walker died as passenger in a sports car that was recklessly careening down the twisty streets of the Los Angeles suburbs, and his estate planning strategy was not an altogether cautious affair. In an article published by Forbes, attorneys Danielle and Andy Majoras call attention to the lessons that can be gleaned (4) from the moment Walker’s father petitioned the Superior Court of California to open his late son’s estate.
“In Walker’s case, we have a will that is part of the public record, and a revocable trust that is kept private and confidential,” explains Rocco Beatrice, Managing Director of Estate Street Partners, LLC, parent company of UltraTrust.com. “In this case, the will revealed the trust; in other cases, a trust can be structured in a way that creates a will when the grantor passes away. Any will is subject to probate, but probate headaches are generally avoided with trusts.”
Walker’s will, in essence, directs all his assets to be transferred to his revocable trust (4). To this end, Mr. Beatrice explains: “This is a good move insofar that it clearly dictates where future earnings must be deposited: Directly to his now “irrevocable” trust. This avoids the uncomfortable process of potential unspoken-for payments ending up as unclaimed property.”
Mr. Beatrice is referring to the unreleased films Fast and Furious 7 as well as Brick Mansions, a remake of a French crime thriller (5). “Those films are bound to produce handsome income for the Walker estate, and his will makes it clear that any future payments must be deposited into the Paul William Walker IV Trust dated August 15, 2001; there is no confusion in this regard. However, there is problem insofar as Walker’s choosing a revocable versus an irrevocable trust.”
As to Walker’s choosing a revocable living trust instead of an irrevocable instrument, Mr. Beatrice commented: “We often recommend irrevocable trusts due to their asset protection, privacy, and tax advantages. We know from Walker’s ongoing probate proceedings that his estate is worth $25 million (4); which is an amount that puts the late actor into a significant tax bracket. When we talk about instruments such as irrevocable trusts, we emphatically address the issue of estate taxation. As of early 2014, Walker would not have to worry about estate taxes in California since that has not been a concern since 2005; however, the federal Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act could shave off close to $8 million of Walker’s estate.”
“Keeping assets in a revocable trust effectively makes them personal and subject to federal estate taxes. Depositing those assets in an irrevocable trust can completely eliminate the estate tax burden,” explains Mr. Beatrice. “As it stands, Walker’s revocable trust puts his young daughter on the hook for nearly $8 million in taxes, something that could have been avoided with an irrevocable trust strategy. We can say that Walker was fast, furious and not altogether careful in this regard – probably because of poor advice.”
Estate planning is not limited to money, real estate and/or investments; there are also family matters to consider. “The Forbes article (4) tells us that Walker did not amend his trust, but he did name a guardian for his daughter Meadow Rain, who is 15 years old and living with her mother. Cheryl Walker, Meadow’s grandmother, is the young lady’s guardian according to the will. Should Meadow’s mother Rebecca Soteros somehow find herself not able to care for her daughter, there would not be a need for a court to appoint a guardian since the young girl’s grandmother has already been appointed.”
It took a couple of months for Walker’s father to submit the will to probate (1). According to Irish publication Independent Woman, the elder Walker was appointed executor of the will (6), and the family did not particularly have to worry about rushing to being probate proceedings. “They took their time because they knew that the Paul William Walker IV Trust dated August 15, 2001 was there to protect the $25 million in assets that he intended for his daughter to enjoy. That’s another very convenient feature of estate planning; you don’t want your survivors to be surprised by over zealous creditors or frivolous lawsuits. When actors and other high net worth individuals pass away, there are often third parties and outsiders who rush to enter claims against estates; but, when they see the presence of a trust, they tend to back away. “
About Estate Street Partners (UltraTrust.com):
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