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“More than 17 years after his passing, Michael Jackson’s family trust remains unfunded.”
That’s from a petition Paris Jackson filed in Los Angeles probate court, as reported by TheWrap on Nov. 2. She’s asking the court to order a $600 million distribution from her father’s estate into the Michael Jackson Family Trust.(1)
Jackson’s 2002 will left his entire estate to that trust.(2) But according to Paris Jackson’s filing, the estate holds about $600 million in distributable cash that hasn’t reached the trust.(1)
The estate pushes back hard. In a statement reported by TheWrap, it said it couldn’t fully fund the trusts until other matters were resolved, including IRS litigation that sought $700 million in taxes and penalties, and that the matter “has not been settled and could still change.” It called the claim that it’s withholding payments a “complete fabrication.”(1)
I’m not here to pick a side in a celebrity court fight. I’ve been a CPA since 1981, and I was the executor of my parents’ estate. What I can tell you is that the lesson for your family is simple: a living trust only protects what’s actually in it.
The American Bar Association says property in a living trust “must be transferred to the trust.”(3) Skip that step, and your family can end up in probate court anyway, and in some states pay fees set by law.(3)(4)
Here are 5 ways to keep your trust from ending up empty.
1. Treat your trust like an empty box until you fill it
When you create a trust, signing trust papers at a lawyer’s office feels like the finish line.
It’s the starting line.
A trust is a set of instructions plus a container. Until you put your house, bank accounts and investments into it, it can’t keep them out of probate.
In my view, the costliest trust mistake isn’t skipping one. It’s paying for one and never funding it.
If you don’t have a will or trust at all, start there.
Trust & Will lets you create a will online for $199, or a trust starting at $499. A will spells out who gets what. A trust goes further, controlling how and when your heirs inherit.
2. Retitle the house and the accounts
Funding means changing who owns things. Your home gets a new deed naming the trust as owner. Your bank and brokerage accounts get retitled in the trust’s name.
It’s paperwork, not magic. Call each bank and brokerage firm and ask exactly what form it needs. Then keep a list of what’s been moved, and update it every time you open a new account or buy property.
Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.
3. Know what a ‘pour-over’ will can and can’t do
A pour-over will is a backstop that sends anything you forgot into the trust when you die.
But here’s the catch. The ABA notes you still need a will for any property that “has not been transferred to the trust during your lifetime.” The ABA also says a living trust can rarely avoid probate entirely.(3)
Probate can be expensive. In California, the fee for the estate’s attorney for ordinary services is set by formula: 4% of the first $100,000, 3% of the next $100,000 and 2% of the next $800,000.(4)
On a $600,000 estate (say, a house and nothing else), that’s $15,000. And the law figures it “without reference to encumbrances,” meaning a mortgage doesn’t shrink the bill.(4)
4. Don’t expect a trust to stop the IRS
As a CPA, I can tell you a revocable living trust is about avoiding probate and controlling who inherits. It doesn’t make estate taxes disappear. Jackson’s estate is a reminder: it says its fight with the IRS is one reason it can’t fully fund the trusts yet.(1)
The good news for most families is that the federal estate tax is a rich person’s problem. The IRS filing threshold for people who die in 2026 is $15 million.(5)
But even if you’re nowhere near that, if you have big savings, a business or property in more than one state, I think professional help could be worth paying for.
For example, SmartAsset offers a free service that matches you with up to three fiduciary financial advisors.
They can help with tax savings, estate planning, investment advice, Social Security strategies, and planning gaps you’d never see alone. And first appointments are typically free. Free, expert advice now, and longer-term, the potential to add a valuable expert to your team. What’s not to like?
The questionnaire takes about 10 minutes and asks for a phone number near the end, but you control whether and when you respond to anyone. SmartAsset is built for people with $100,000 or more in investments.
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5. Pick a trustee who will actually act
Paris Jackson’s petition says the executors “have never presented any plan for funding the Michael Jackson Family Trust to the Court.”(1) Whatever the merits, it shows how much power the people you name will have.
Choose a trustee and an executor who are organized, trustworthy and willing to do the work. Then tell your family where the documents are.
My honest take
Michael Jackson did one big thing right: he had a plan. His will pointed everything to a trust for his family.
But a plan on paper isn’t the same as a plan in place. Seventeen years later, his daughter is in court asking when the money will move.
Your estate is probably simpler. That’s exactly why there’s no excuse. Spend one afternoon moving your accounts into your trust, and your family can spend their time grieving instead of filing petitions.
Sources: 1. TheWrap; 2. The Irish Times; 3. American Bar Association; 4. California Probate Code § 10810; 5. IRS
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