According to recent probate court papers, the administrators for Michael Jackson’s estate have recovered $5.5 million from one of Michael Jackson’s “former financial advisers,” according to a CNN story.

Along with some contracts that Michael Jackson’s estate possess, the lawyers for the administrators are hinting that even with the monstrous debt Michael Jackson had, that the estate will be solvent and will be able pay out to a trust for the benefit of his three minor children, according to the article.

This is very good news for his children.  The more assets that the administrators can uncover to fund the estate, the better off Michael Jackson’s minor children will be.

In the end, it appears that Michael Jackson’s estate plan may be pretty well put together, in stark contrast to the mess that Steve McNair has created by having no estate plan at all.

You can read about the Steve McNair estate here: Steve McNair Estate Plan Mistakes.

Christopher J. Berry, Esq., An Michigan Living Trust Lawyer, is a Partner with The Law Offices of Witzke Berry PLLC, which practices in the areas of Estate Planning, Elder Law, and Michigan Probate Litigation.

Utilizing a Michigan Pet Trust or Animal Care Trust is a great planning tool to use when you have pets (cats, dogs, horses, etc) that you want to ensure are taken care of after you pass or become incapacitated.

Planning for your pet is very important because without proper planning your beloved pet there could be no one to care for him or her and no funds to provide for care for your pet. Worse yet, your pet could be euthanized if no home can be found.

With proper planning and using an Animal Care Trust or Pet Trust, your beloved pet can be cared for how you would want him or her to be cared for in the environment of your choosing.

Basically, a Michigan Pet Trust is similar in design to how you would select trustees and guardians for your children. However, instead of a a guardian for your children, we select a Caretaker to take care of your beloved animals. The Trustee handles the funds, while the Caretaker provides the day to day care taking of the pet ensuring a loving safe environment.

Sometimes people think a good option for setting up someone to care for their pet is to provide a monetary gift in their estate plan to an individual and then tell them to take care of the pet. This can be dangerous, because that monetary gift does not need to be used for the benefit of the pet. After you pass, they could spend that gift on anything they want and then take your pet and drop him or her off at the Humane Society.

The better alternative for your pet and your peace of mind is the Michigan Animal Care Trust.  With these trusts, your Trustee keeps the funds separate from the Caretaker’s assets.  This means the assets must be used for the benefit of your pet and if the Caretaker were to get divorced, sued, go bankrupt, the assets would be protected.

It is important to work with a Michigan estate planning lawyer who is familiar with pet planning and Animal Care Trusts or Pet Trusts, because they are relatively complicated documents.

Christopher J. Berry, Esq., A Michigan Pet Trust Lawyer, is a Partner with The Law Office of Witzke Berry PLLC, which practices in the areas of Estate Planning, Trusts and Estates, and Animal Care Trusts.

“My parent is currently on Medicaid and is about to receive a windfall from an inheritance that will disqualify him from Medicaid, what can we do?”

Well, as a Michigan elder law attorney, my first response is that “it depends.”  It depends on more facts.  Some possible ideas include, basically, converting the new assets into exempt assets in the month the windfall or inheritance was received.  For example, the Medicaid parent could purchase a prepaid funeral, buy a car if he doesn’t own one, by medical equipment, or furniture.

What Michigan Medicaid planning strategies we can use depends on more facts.  But, basically, one of the easiest and best options is convert the assets into exempt assets.

Christopher J. Berry, Esq., A Oakland County Medicaid Planning Attorney, is a Partner with Witzke Berry PLLC, which practices in the areas of Estate Planning, Michigan Long-term Care Planning, and Michigan Medicaid Planning.

The Michael Jackson estate plan could turn out alright. He had a Will that poured over into a Living Trust for the benefit of his family and children. If he had assets after all his liabilities his Living Trust should provide the tax planning necessary to reduce his Federal Estate Tax amount to a manageable number or even zero.

Well, Steve McNair estate appears to be in an entirely different boat. By all reports, Steve McNair, the former Tennessee Titan quarterback, died “intestate”, in other words, without a Will or Living Trust. Wow! Just wow!

Steve McNair may have just been able to fund one of President Obama’s Federal programs himself with the estate taxes that his estate and family may end up paying. On top of this is the fact that his wife (who he was apparently cheating on) is now the administrator of his estate and will be walking away with a portion of his assets that could have been held for the benefit of the children.

Focusing more on the Federal Tax aspect of Steve McNair’s failure to plan, Florida Estate planning lawyer David Shulman, who beat me to the punch (as he usually does), has a great post that reviews the Federal Tax implications. You can read David’s well written post here: Steve McNair died without a Will. The consequences could be disastrous.

To break it down to show just how much Steve McNair is “gifting” to the IRS because he had not done a proper estate plan, this year the Federal Estate Tax exemption is $3.5 Million.  What that means is that anything left to anyone other than his wife this year over $3.5 Million will be taxed.  The tax rate is 45%.  I don’t know the size of McNair’s estate, but I do not according to ESPN, his last contract if it paid out the maximum was worth $32 Million.  So, let’s assume his estate is worth $32 Million.I am not licensed in Tennessee, so let’s just assume the spousal share is 50% and the child’s share is 50%.

McNair’s estate could be writing the Federal Government-IRS a check for $5,625,000.

This is calculated by taking the amount not left to the spouse $16 Million, subtracting the exemption amount $3.5 Million, multiplying by the tax rate of 45%, and there you have it.  McNair writing the Feds a big hefty check for money that could have went to his children or charity.

This sad story all around is a tale of why if you have loved ones, you need to think about estate planning.  You never know when life is going to throw you a curve ball.  If you want to ensure that your loved ones receive the support after you pass or are incapacitated, you need to sit down with an estate planning attorney.  You don’t need to be writing a huge check to the Federal Government and the IRS.  That money could go to your children, loved ones, or your favorite non-profit.

Christopher J. Berry, Esq., An Oakland County Living Trust Attorney, is a Partner with The Law Offices of Witzke Berry PLLC, which practices in the areas of Estate Planning, Medicaid Planning, and Michigan Probate Litigation.

The confusion over whether Michael Jackson had a will based estate plan or a living trust based estate plan probably led to the AP article discussing the differences between a will and living trust. You can read the article, including the Michael Jackson reference here: Will or Trust? Understanding the differences.

As the article explains, a will based estate plan is typically used when you’re only making one time distributions to individuals and do not care that your heirs have to use the Michigan probate court to administer the estate.

A living trust based estate plan avoids probate and also has provisions so that you are not leaving lump sum assets to beneficiaries.

Christopher J. Berry, Esq., A Bloomfield Hills Living Trust Attorney, is a Partner with The Law Offices of Witzke Berry PLLC, which practices in the areas of Estate Planning, Trusts and Estates, and Michigan Probate Litigation.