While the untimely death of Robin Williams shocked many, the comedian had the presence of mind to prepare for his family's financial security.
Even if you don't have an estate the size of the late, great Williams, which was valued at a reported $50 million, you want to make sure your hard-earned assets are protected.
Williams was a genius on the big screen, and when it came to financial planning, he wasn't too shabby, either. Nonetheless, there are things to be gleaned both from what he did right and what he could have done better. Here are three valuable lessons learned from Robin Williams' estate plan.
Lesson No. 1: Give Your Kids Options
Williams in 2009 through a divorce established what is thought to be a revocable trust for his children. Based on the way the trust is said to have been structured, his children would receive lump sums of cash at three distinct ages in their young-adult lives: 21, 25 and 30 years old.
The problem with this approach is that there's no flexibility in the distribution method. For instance, his children might receive a large payment at an inopportune time, such as before they're financially mature enough to handle it. Or perhaps they're going through a marriage separation or divorce, in which case the assets would have to be shared.
A wiser plan may have been to extend the option to the beneficiaries to name a personal trustee over the funds and make periodic withdrawals at their discretion.
Lesson No. 2: Protect Your Estate From Taxes
Williams had vast real estate, including an estate in California's Napa Valley that he put on the market for nearly $30 million before his untimely death. Between that property and a $6 million home in Tiburon Calif., Williams had about $25 million in home equity, according to Forbes.
He created an irrevocable real estate trust for his properties, which was an astute move. By creating this trust, he protected two things: his privacy, as he gave the trust a Latin code name, and equity in the property that would have otherwise gone to estate taxes.
If you own real estate, you should consider a similar approach to protect your equity from Uncle Sam.
Lesson No. 3: Expect Change
Williams was married multiple times and had children from several of his marriages. If there's one thing he knew it was that change was inevitable. That's probably why he likely chose to structure at least one trust as a revocable trust. The nature of a revocable trust is to allow for changes without having to overhaul the entire product, and it served someone like Williams, who had a lot of change in his life, well.
Conclusion
While your estate planning likely won't be as complex as Williams' was, that doesn't mean you should shy away from the process. Providing for your loved ones after you're gone will give them some assurances at a time when they need it most. Williams' approach can serve as a guide, but our Torrance estate planning lawyers will tailor your estate planning to your life. Contact us to learn more.
