Wills Are Public Information / Trusts are Not
Following the tragic death of Paul Walker, it was reported that he bequeathed approximately $25 million in assets to his daughter. How did they get that information? It was in the probate filings of his executor, which also (presumably) contained a copy of his last will and testament. One can make a very strong argument that one’s financial situation, especially upon death, should be a private matter. Why should it be public information?
However, consider the other side. Wills provide information to the families. If the wills were not public information, then estranged family members, or at least quarreling family members, would have no notice of whether they were getting duped. Information contained in the will could also provide evidence of fraud, forgery, or the lack of testamentary capacity. For instance, perhaps certain family members notice it is not the decedent’s signature. Or, perhaps the decedent was in a coma on the date the will was supposedly executed. Additionally, the public filing answers the question as to whether a family member was included as a beneficiary, such as a grandchild or sibling.
In Texas, every Application for Probate requires the last will and testament to be filed along with the application unless the decedent died intestate (without a will). Additionally, the probate process requires that an inventory of the assets and claims be filed with the court. Both requirements serve incredibly important functions to ensure the decedent’s last rights are granted.
Still, it is certainly possible to avoid airing your personal financial situation to the world. For instance, in certain circumstances, a will can be sealed from public record. Additionally, though, a person can place their assets in a trust prior to death. Trusts do not get probated.
A revocable living trust is an instrument in which a person, as the trustor, transfers some or all of one’s assets into the trust. During the trustor’s lifetime, the assets are considered to be within the trustor’s estate for many purposes because of the revocable nature of the trust. However, upon death, the trusts most always become irrevocable. The change to irrevocable status totally removes the assets from the trustor’s estate, and thus the assets in the trust do not have to be probated. An irrevocable trust can be similar to a revocable trust, but the assets are irrevocably removed from the estate of the trustor at the time of transfer instead of the time of death. Whether a person should choose a revocable trust or irrevocable trust depends on one’s situation.
Consider again the case of Paul Walker. We really do not know what he left his daughter. It is quite possible that he created a trust and transferred assets into it years prior to his death. If so, the assets in the trust would not have been reported. So, who knows? Perhaps his daughter received much more than a $25 million inheritance.
To review your own estate planning situation, you should contact a local attorney.
Robert Newton is an attorney based in Frisco, Texas, that practices estate planning, real estate law, business law, and corporate law. This post is meant for informational purposes only and does not constitute legal advice.