Here are the first two paragraphs and I urge you to visit her site and read the rest. Well-written and very informative:

Like many people my age, I am a HUGE fan of “early” Michael Jackson. Loved him pre-surgery, during the disco and Thriller eras. It was sad to watch such a talented individual become a self-hating recluse. It was sad to see him on trial for sexual molestation of a young boy, and I can only hope that he didn’t really do it. He was acquitted, in any event. It kind of made me sad to see how oddly it seemed he was behaving with regard to his kids – contracts with the birth mother, veiled faces, a baby dangled over a balcony…remember the weirdness?

Now everyone is talking about how much money he left behind and how complicated his estate will be, what with all of his credit and debt issues and split ownership of certain rights to music. There’s a lot of talk about how it could take years to settle his estate. I guess that mostly depends on the type of estate planning he’s done, and we’ll find out all about it soon enough.

But what about the kids?

Here is the link to the entire post.

A good part of my practice is dedicated to helping families with young children complete their essential legal planning. Some of that planning has to do with protecting inheritances and making sure that what they leave will be there for their children when their children need it most.

Seems like the Wall Street Journal agrees with me. On June 3, 2009, the WSJ printed an article taken from a new book, “The Wall Street Journal’s Financial Guidebook for New Parents” by Stacey L. Bradford. Here’s a brief excerpt of the June 3rd article:

Do you anticipate leaving your children more than a modest sum of money?
A trust may not be worth the effort if you think you’ll only be leaving a child (or children) $100,000 or less. On the other hand, if you’re leaving life insurance money to cover four years of school and you own a home, there’s a good chance a trust would make sense for you.

Do you want to have some say in how your children’s money is spent?
A trust allows you to restrict spending to basic support, including food, clothing, education and health care. This is something that can’t be done with a custodial account. If the custodian is a soft touch, he could end up lavishing your child with designer jeans and a fancy car, leaving very little left for the college years. Even worse, if the custodian is also the guardian, he could start writing himself large “support” checks to help cover his other expenses.

Would you prefer that your children not inherit the money when they turn 18 or 21?
If you think giving a high-school senior a large sum of cash is a recipe for disaster, then you should consider a trust. The ability to delay inheritance was the main draw for drafting a trust for Laurie and Greg Wetzel, a New York City couple in their mid-30s with three small children. Should something happen to both of them, they decided, their kids will each receive half of their inheritance at age 30, and the remaining amount when they reach 35.

“Your 20s are such a transitional time that we don’t want our children to have significant financial decisions to make,” Ms. Wetzel says.

Do you want the money to be used for a college education?
If you specifically bought life insurance so that there would be enough money to help fund college in the event of your death, then you’ll definitely want to delay the age at which your kids inherit your money. Otherwise, your child could think a red Ferrari is a better investment than a crimson Harvard diploma.

Would you like your children to have recourse if their money is mismanaged?
One more benefit of a trust that you don’t get with a custodial account is that a trust is a legal contract; the trustee has an obligation to follow your directions and act in a reasonable and prudent manner. If the beneficiary feels the trustee spent the money frivolously, he can demand an accounting, and can sue for reimbursement if the trustee acted improperly with the funds. It may be pretty tough to prove illegal or improper actions with a trust, but just the threat of a possible lawsuit can keep someone in line.

This is all pretty sound advice from the Wall Street Journal. Although New Jersey permits you to create a testamentary trust (a trust created in the will) that doles out money over time, that’s not always the best choice for a number of reasons.

One of the things I think the WSJ article gets wrong is when it tells parents not to worry about signing standard forms. I think that’s lazy lawyering and bad client service. When we design an estate plan for a client, that estate plan is customized to the client’s specific circumstances and goals. I would advise clients request the same from any estate planning attorney they visit and walk away if that attorney is unable, or unwilling, to honor that request.

Posted by Victor J. Medina,
Medina, Martinez & Castroll, LLC