A common reason people offer for not having an estate plan in place is the belief that one is only needed if you have considerable assets. That might lead you to believe that people who do have substantial assets would have a well thought out plan in place. That, however, is not always the case. In fact, some very well-known celebrities have died and left behind estate planning disasters. The Tucson estate planning lawyers at Morris Hall, PLLC discuss five of those celebrity estate planning disasters.
- Failing to Execute a Will (Prince Rogers Nelson “Prince”). Known simply as “Prince,” this famous singer died at the relatively young age of 57 in 2016. Shockingly, he had not executed even a basic Last Will and Testament prior to his death, leaving a Minnesota judge to decide how to distribute Prince’s estimated $300 million estate among six siblings. Other potential heirs surfaced too, including a federal inmate claiming to be Prince’s son. When someone dies without so much as a basic Will in place, the state intestate succession laws dictate how the estate is distributed. Prince may, or may not, have wanted his siblings to share his estate equally. Failing to execute a Will means he did not get the opportunity to decide.
- Failing to Update an Estate Plan (Whitney Houston). Whitney Houston did have a Will when she died in 2012, but it was executed a month before the 1993 birth of Houston’s only child, daughter Bobbi Kristina Brown. Unfortunately, Houston never updated her Will. By the time of her death, her fortune had climbed to $20 million and her daughter, Bobbi Kristina, was 18 years old. Under the terms of the old Will, Bobbi was to receive 10 percent of the estate – $2 million — when she turned 21 and the remainder later. Unfortunately, failing to update her Will meant that Houston failed to consider whether her daughter was mature enough to handle millions of dollars at such a young age. Sadly, Bobbi Kristina got the $2 million but never received the rest of her inheritance because she died in 2015. Updating her estate plan by creating a trust could have helped to help protect and manage Bobbi’s inheritance.
- Hefty Tax Bill Caused by Incomplete Planning (James Gandolfini). The Sopranos actor James Gandolfini was reportedly worth $70 million when he died in June 2013 of a heart attack while on vacation in Rome. He executed a Will prior to leaving on his vacation that provided for his widow, daughter and two sisters; however, Gandolfini didn’t incorporate tax avoidance strategies and tools into a comprehensive estate plan. Consequently, the estate ended up paying federal and state estate taxes at a hefty rate of 55 percent. Gandolfini could have taken s little extra time and included some tax avoidance strategies with his Will that would have saved his estate, and consequently his loved ones, a considerable amount of money that went to Uncle Sam instead.
- Failing to Fund a Trust (Michael Jackson). Michael Jackson’s death in June 2009 touched off a string of ongoing court battles over his estate, now worth $600 million. Among Jackson’s biggest estate planning mistakes was creating a trust but failing to fund it. Absent a properly funded trust, Jackson’s beneficiaries wound up numerous times in probate court and the estate remained open and subject to court approval. A simple Pour Over Will, which “pours” over all estate assets into a trust at the time of death, could have prevented this disaster.
- Inadvertently Omitting a Child (Heath Ledger). After actor Heath Ledger died in January 2008, reports surfaced that he had failed to update an old Will created before his daughter was born. As a result, Ledger’s entire $20 million estate went to his parents and three sisters. Fortunately for everyone involved, relatives revealed in late 2008 that all of Ledger’s money would go where he would have wanted — to daughter Matilda Ledger, whose mom is actress Michelle Williams. His daughter, however, could have been left with nothing as the beneficiaries are not legally obligated to do anything for his daughter. A well drafted Will should always have language that references any future born children. By including them even before they exist, you know they are accounted for from the moment they do exist.
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For more information, please join us for an upcoming FREE seminar. If you have additional questions about estate planning, contact the experienced Tucson estate planning lawyers at Morris Hall PLLCby calling 888-222-1328 to schedule your free consultation today.