Celebrity Estate Planning Mistakes
Celebrity estate planning mistakes are just as messy as those of regular people. However, they are on a far bigger and more public scale. As a result, they can serve as cautionary tales to people who might otherwise neglect their estate planning.
High Profile Names and Family Matters
The most recent high-profile estate battle concerns the estate of Lisa Marie Presley. Shortly after her death, her mother, Priscilla Presley, contested an amendment to Lisa Marie’s trust. Priscilla claims the amendment is fraudulent because it was never delivered to her, the document misspelled her name and Lisa Marie’s signature is inconsistent with her usual signature.
This is an example of how taking a shortcut to change a will through codicils or a trust through amendments can lead to serious problems. Revisions to estate plans or trusts are best done by drafting entirely new documents.
Prince died at 57 with no will and a $300 million estate. He wasn’t married and had no children. However, he did have six siblings who spent six years battling over the estate and numerous individuals claiming kinship. During probate, two siblings died, making the estate even more complicated. In addition, the estate paid tens of millions in federal and state estate taxes, all of which could have been protected by an estate plan.
Actor James Gandolfini had a will but should have paid more attention to tax planning. He gave his wife 20% of his estate and the rest to his children and other family members. There were trusts for the children, so some effort went into the estate. However, more was needed. Had he left his estate to his wife, the estate tax could have been avoided. Instead, 55% of his total estate went to pay estate taxes.
Protecting Privacy and Heading Off Possible Litigation
Estate taxes are only a part of the reason to have an estate plan. Maintaining privacy and preventing family litigation are reasons for high-profile and ‘regular’ people to have estate plans.
Most people don’t realize how much their personal life becomes part of the public record after death. Wills going through the probate process are accessible to anyone who wants to see them, including estranged family members, criminals and anyone who asks. This is why families experiencing a loss are often flooded by letters and calls from people who want to know if the family home is for sale, offering investment opportunities, etc. Some of these are legitimate, but many seek to take advantage of surviving spouses during difficult times.
When wealth passes through a fully funded revocable living trust, there are no court records for journalists, family members, or thieves to pore over. Such trusts can be contested but usually less successfully than wills. Passing wealth through inheritance trusts, whether created under a will or a revocable living trust, also enables you to set terms for when your wealth will be distributed. For example, the inheritance can be distributed in whole or in part after certain life milestones are reached.
We will continue to read about the celebrities who fail to put estate plans in place or neglect to update their wills or trusts to reflect changes in their lives. It is better to read about their mistakes than to make your own.
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