And how you can learn from them
While you may not have a billion dollar estate, own multiple mansions, or have your own clothing line, the same basic estate planning rules that apply to the celebrities also apply to you. Plus, the estate planning mistakes celebrities make are generally the same mistakes most Americans make. Here are the top three mistakes in celebrity estate plans:
1. Not Creating an Estate Plan
Many celebrities have died without an estate plan, and when you are dealing with estates in the million and billion dollar range, this almost always leads to long court battles, tearing apart family and friends in the process. In fact, 30 years after his death, Bob Marley's heirs are still fighting over his estate. Also, Martin Luther King, Jr.'s estate continues to be a matter of great controversy even 43 years after his assassination.
Other celebrities that have died without an estate plan include Jimi Hendrix, Kurt Cobain, Marilyn Monroe, John Lennon, Steve McNair, Jim Morrison, Elvis Presley and more. Without a properly drafted estate plan, the courts must get involved, often resulting in battles that continue for decades, unmet wishes of the deceased and destroyed relationships.
2. Not Keeping Documents Current
If one lesson could be learned from the estate of the Godfather of Soul, James Brown, it would be to keep your documents current. James Brown died on Christmas day in 2006, and the court battles over his trust continue still today. Why? Brown did not update his documents after his marriage or after his last child was born, making it difficult to assume what his wishes would have been had his documents been kept current with his situation.
Anna Nicole Smith's situation was similar as she had not put updated planning in place after the death of her son and the birth of her daughter. Heath Ledger also did not update his will after the birth of his daughter Matilda Rose, leaving his entire estate instead to his parents and sister. In fact, the majority of estate law suits being filed in the courts are due to estate plans not being updated after divorces, marriages, births or upon joining families. Estate planning documents should be updated after any major life change, and should be reviewed every 3-5 years to ensure they are up-to-date with your situation and with current law.
In some cases the celebrities do get it right! Although Amy Winehouse died unexpectedly at the young age of 27, she had updated her will to ensure her funds didn't go to her jailbird ex-husband Blake Fielder-Civil. We sure hope Kim Kardashian learns from Winehouse and updates her documents to exclude her husband of 72 days, Kris Humphries, from receiving any part of her fortune. In fact, whether you were married for a mere 72 days or 72 years, the former spouse can still try to claim a portion of your assets unless otherwise stated in your estate planning documents.
3. DIY Documents, Letters and Verbal Agreements Don't Cut it!
One would assume that a Chief Justice would know better than to create a do-it-yourself estate plan, however, such was not the case with Warren Burger. Even with all his years in the judicial system and as a Chief Justice, Burger simply wrote a will of 176 words to suffice as his estate plan. Needless to say...it did not suffice! In fact, he lost over a third of his millionaire estate to estate taxes, which could have easily been avoided with proper planning. Also, his executors had to pay large amounts for court approval of any estate administrative details, which with a trust would have made permissible without approval.
Princess Diana also wrote down her wishes to have her belongings divided between her sons and her 17 godchildren. However, instead of each getting assets worth approximately $100,000, each godchild received merely a trinket.
Now, if self-written wishes are not sufficient, it should be no surprise that verbal agreements don't hold out in court either. Actor Marlon Brando supposedly gave his house to his lover Angela Borlaza, also promising her continued employment with a company he owned. However, Brando never wrote an estate plan or any documents showing these wishes and had never placed the house in anyone's name but his own. Borlaza was kept from the home and out of the actor's large estate, given only the sum of $125,000 - a small portion of what Brando allegedly wished her to have.
Learning from Their Mistakes
While our situations may not be the same as those of the celebrities mentioned above, we can still learn from the mistakes they have made. Make certain that you create a properly drafted and legally binding estate plan to dictate your wishes and keep your loved ones from elongated court battles.
Once you have a plan, keep it current! Any time you have a major change in your life, update your trust! Also, review your trust every 3-5 years to ensure it still meets current legal requirements and still reflects your wishes. At MH, we do not charge for a review of your documents, so make sure to take advantage and review them regularly.
And lastly, do not trust DIY documents or verbal promises to be sufficient - they will not hold up in court. If you truly wish to pass on your estate to those you love, make sure you do it properly: with an estate plan from Morris Hall.
For more information on celebrity estates, we recommend visiting "Trial & Heirs" at www.trialandheirs.com