Lessons to learn from the celebrity estate of Meat Loaf
Part 3 of a 3-Part Series
Two weeks ago, we started a series about lessons to learn from the celebrity estate of the late rock-n-roll artist Meat Loaf. Click here to read part one and part two of that series. While we previously discussed estate taxes and lifetime exemptions, this week we conclude by focusing on blended families.
Estate Planning for Blended Families
Blended families challenge us in life and death. Someone with children from a previous marriage balances wanting to provide for their children and their spouse. Specifically, concerns arise relative to the money left to the current spouse. People also wonder how to leave assets to children from a previous marriage. In such a case, the surviving spouse may not wish to take care of children from blended families.
Celebrity Trusts
For someone like Meat Loaf, a qualified terminable interest property (QTIP) trust may work. An estate planning attorney structures a QTIP trust so that the surviving spouse receives income from the trust property throughout her life. However, when she dies, the remainder of the trust assets pass to children. In this case, the wife would be prevented from excluding the kids. In other words, if Meat Loaf had set up a QTIP trust, the funds would be distributed according to his wishes. His wife would not control the disposition of the remaining funds at her death.
Pot Trusts & Blended Families
Instead of setting up a single or “pot” trust for multiple beneficiaries, Meat Loaf could have chosen instead to establish multiple trusts that took immediate effect at the time of his death. Such separate sub-trusts, or testamentary trusts, can be created for separate family members to simultaneously meet the needs of blended families.
There is some evidence that Meat Loaf used trusts, so he may have created living trusts that distributed assets during his lifetime. Variety reports that Meat Loaf and his wife held at least two homes in the same trust. It could be that when Meat Loaf died, the property in this joint trust became his wife’s exclusive property.
Meat Loaf’s Plans Could Remain Private
The press may reveal the fate of Meat Loaf’s estate in time. If the estate goes through probate, the probate records become public. However, if Meat Loaf properly funded and used trusts to his advantage, the details may not enter public record. If this occurs, we may never know what happened to his fortune.
State Intestacy Laws
If Meatloaf failed to create an estate plan, state intestacy law applies. Meat Loaf owned homes in multiple states. However, it appears that he resided in Tennessee when he died . This means that a Tennessee probate court would oversee the domiciliary proceeding. Meanwhile, California and Texas would maintain jurisdiction over real estate subject to any ancillary proceedings. In addition, the laws of the state where real estate is physically located typically govern what happens to that property when the owner dies.
Worst Case Scenarios
Though intestacy laws intend to accomplish what a state assumes the decedent wants, dying intestate is often a worst-case scenario. For instance, the decedent effectively loses control over the details of their legacy. However, celebrities are not alone in their need for an estate plan. Every living person should have a basic will outlining which assets go to whom. Beyond that, many ways exist to divide assets among trusts. Through savvy estate planning, individuals of any net worth control their legacy,. They also avoid estate taxes and provide for loved ones long after they are gone.
For help and guidance designing your estate plan, please reach out to our office and schedule an appointment.
About Skvarna Law Firm in Glendora and Upland, California
A skilled attorney can assist with your estate plan. Contact us today to learn about your options (909) 608-7671. We operate offices in Glendora and Upland, California. We provide legal services for individuals living in San Bernardino, Los Angeles, Orange and Riverside Counties. This includes the cities of Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Montclair, Pomona, La Verne, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
