For many Americans, their home is their largest asset. Yet despite decades of warnings from attorneys and financial professionals, a significant percentage of homeowners still have no estate plan in place, and even fewer have established and properly funded a living trust. My mentor, who specializes in setting up estate plans, drilled this into my head from the very beginning of my career. Outside of my years as an advisor in a bank (where we were told to put on our blinders and focus only on asset management), I’ve always tried to emphasize this area of planning. Countless families remain exposed to probate, facing massive unnecessary costs, painful delays, and potential disputes right when they would likely be least prepared to handle them.
Just look at the headlines involving music mogul John McClain and filmmaker Rob Reiner. Their recent situations represent two very different estate planning lessons. For McClain, the first scenario demonstrates the consequences of not having a plan at all. The second scenario highlights why estate planning should not be viewed as just a one time event.
Case #1: Even Estate Experts Can Fail to Plan for Themselves
John McClain helped oversee one of the most complex and successful celebrity estates in history: the estate of Michael Jackson. After suddenly passing at age 71, McClain allegedly left around $20 million in assets without a will anywhere to be found. He is survived by his sister and nephew as his closest living relatives, and the probate filing has already commenced. Managing a sophisticated estate for almost 17 years requires extensive knowledge of asset transfers, tax planning, fiduciary responsibilities, and wealth preservation. For someone with that much estate administrating experience to postpone putting his own affairs in order, the irony is difficult to ignore. It would sort of be like suggesting that a health empire like 24 Hour Fitness should be owned by the same company that owns fast food chain Pizza Hut, but I guess truth can sometimes be stranger than fiction.
Let’s briefly pivot to someone hypothetically named Will McShane. Imagine a scenario where Mr. McShane owns a home and has an unmarried live-in partner of 30 years, with no children and no other close relatives. He does remember a long lost nephew, but he can't remember the last time they spoke. Mr. McShane doesn’t have a will. But he thinks that when he dies, the house will just go to his partner. The problem is that probate might not work that way. Probate starts with the bloodline, and that sole, long lost nephew could jump ahead and inherit Mr. McShane’s house with the rest of his entire estate, while Mr. McShane’s long term partner could end up on the streets with nothing. Mr. McShane could technically add his partner onto the title to avoid probate, but then that opens up a whole new can of capital gains problems, property tax reassessment issues, and co-ownership risk.
Hey Will, did you know your will will go through probate?
What happens when you create a will? It’s a good start, it’s better than nothing. But having only a will simply means your estate will still go through probate, which is a court supervised legal system that is used to validate the will before distributing assets to the rightful heirs. And not having a will means an even lengthier process where the probate court must first appoint an administrator to the estate.
Probate is Costly, Time Consuming, and Everyone Can See Your Dirty Laundry
If the most recent news reports are accurate, the absence of a will means McClain’s estate will almost certainly proceed through probate administration. Probate can be entirely public, as we already see playing out in the news. Probate can also be incredibly costly, particularly in California where McClain resided and passed away. If the alleged $20 million figure is accurate, standard statutory fees could easily exceed $300,000 just to administrate the case, even with minimal complications.
The probate process is also time consuming, with typical cases in California averaging 9 to 18 months, and possibly much longer for estates as large as McClain’s. While a case is ongoing, beneficiaries are likely to face delays in accessing the funds necessary to settle an unresolved estate, such as paying final bills, debts, or burial expenses. Even worse, if there are estate taxes to be applied to large estates, those payments are strictly due 9 months after passing. This means McClain’s case could still be tied up in court while a massive tax bill comes due. Ultimately, it isn’t just a financial cost to the family in the form of legal expenses, but the lost time, uncertainty, and immense stress that accompanies probate proceedings. Proper estate planning and the usage of living trusts would have mitigated most, if not all, of these problems.
The Solution: Build an Entity That Cannot Die
A living trust is a legal entity that holds your property, and since that entity cannot die, your assets are shielded from probate court. Essentially, the trust owns your home, and you own and fully control the trust. Within this document, you choose a trusted person to handle your affairs if you become incapacitated, dictate exactly how your beneficiaries inherit your wealth, and name a successor trustee who takes over after you pass away.
If you create a revocable living trust, you maintain complete control to make changes or dissolve it at any time. Since your beneficiaries are already named, the assets transfer seamlessly and completely bypass the public probate process. If your assets grow past a certain value, more sophisticated estate planning strategies may be required. But the most important first step is simply to avoid probate.
Estate planning is not just for the wealthy or the elderly. It is for anyone who has any form of assets subject to probate, such as a home, and who wants to make life easier for the people they leave behind.
Case #2: Creating a Trust Is Only the Beginning
Suppose you have already established a living trust and have funded it by transferring your home, your bank accounts, your non-retirement brokerage accounts, and any other assets subject to probate. Many people assume the job is finished. In reality, that may only be the first step. Life changes. Families evolve. New assets are acquired. Tax laws change. Trustees pass away or become unable to serve. Relationships improve or deteriorate, marriages and divorces can happen. Children are born, grow older, and may get married, sometimes to spouses you might not particularly approve of. An estate plan that made perfect sense ten or twenty years ago may no longer reflect current realities.
Let’s explore the recent trust dispute involving the estate of famed director Rob Reiner and producer Michele Singer Reiner, which illustrates how complicated trust administration can become when circumstances change over time. Reports indicate that Rob Reiner’s son Nick, age 32 and currently incarcerated, has pled not guilty to the murder of his parents, and is seeking access to a trust fund that his parents established for him years earlier. Nick believes that he was supposed to receive half the funds on his 30th birthday. According to his petition, the trustee withheld the payout due to a questionable “capacity to make sound decisions”, and Nick now wants access to that money for his criminal defense legal fees.
His new incoming trustee has agreed to file paperwork to get the money released to him, but the final decision will come from the presiding judge. In 2028, Nick will reach age 35 and the other half of the trust assets would be due to be disbursed. At this time, Nick is not petitioning for assets of the overall Reiner family estate, which is presumably much larger. However, those assets could eventually be subjected to future litigation as well.
Now for the twist of irony. What seems to be happening is Nick wants access to his trust by arguing the trustee had no right to invoke the competency clause to withhold his trust fund at age 30. He is making a claim of financial competence under the definition of the trust despite a history of diagnosed schizophrenia, struggles with drug addiction, stints of homelessness, destruction of family property, being in and out of rehab at least 18 times, and being placed under a yearlong conservatorship in 2020. If Nick can successfully access his trust fund, thereby "proving" mental competence, he plans to bring on high profile Hollywood defense attorney Alan Jackson, who will likely anchor the defense strategy around Nick’s episodes of severe mental illness to secure an acquittal in criminal court. Absolutely wow.
While we can’t know whether periodic reviews of the Reiner family’s trusts would have altered this current predicament, this situation serves as a reminder that trusts are not static "set it and forget it" documents. Estate planning documents should evolve alongside the family they are designed to protect.
Regular reviews provide opportunities to:
• Confirm beneficiaries still align with your wishes.
• Reevaluate trustee and successor trustee selections.
• Adjust for changes in family dynamics.
• Determine whether specific trust language is sufficient for evolving situations.
• Incorporate newly acquired assets.
• Review tax planning opportunities.
• Ensure documents remain consistent with current law.
• Verify that trust funding remains complete and accurate.
Estate planning attorneys recommend reviewing documents every three to five years, or sooner following major life events such as marriages, divorces, births, deaths, business sales, or substantial increases in wealth.
Build Your Plan and Keep It Current
Every so often, high profile cases such as John McClain and the Reiner family present us with stark reminders of why it’s important to get our affairs in order and keep them up to date. Don't wait for an unexpected crisis to find out that your hard earned assets are unprotected.
While I do not provide standalone legal services through my wealth management practice, I routinely coordinate directly with approved, independent estate planning law firms to ensure our clients' financial assets and living trusts are fully aligned. If you want to learn more about how to set up an estate plan, or need to review your existing trust to ensure your parameters are current, reach out today. Let’s work toward protecting your family’s future together.
Important Disclosure: Conscience Wealth Services and LPL Financial do not provide legal advice or services. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.