Highly-publicized battles fought over the estates of famous people offer valuable lessons for people in every tax bracket. Working with a Life Care Planning Law Firm can help you avoid similar mistakes.
John Burns, founder of John Burns Estate and Elder Care Law, PLLC, a Life Care Planning Law Firm with offices in Decatur, Alabama and Franklin, Tennessee, helps us understand five of the most common estate planning mistakes made by the rich and famous.
Do It Yourself
In an ironic twist, Exhibit A for a DIY disaster is Warren Burger, former Chief Justice of the United State Supreme Court whose will was rumored to be less than 200 words. “While I admire his brevity, he omitted some key clauses and it cost his family more than $400,000 in unnecessary taxes,” said Burns. “If Warren Burger can’t do it himself, the average guy can’t either.”
What do Jimi Hendrix, Aretha Franklin, Sonny Bono, Princess Diana, and Prince have in common? They died without a will or trust. And they’re by no means alone. “If you don't do anything, at the very least, there will be hard feelings among family,” Burns cautioned, “At most, there will be lengthy litigation.”
Make a Mistake
James Gandolfini of Tony Soprano fame had a will drafted just before he died. Apparently, his attorneys forgot to tell him that you can leave an unlimited estate to your spouse with no tax bill. Not so with the kids, who ended up writing a big check to the IRS. Actress Marilyn Monroe left her entire estate to acting coach Lee Strasberg with no stipulations. Strasberg, in turn, left his estate to this third wife. “This woman and her children, whom Marilyn never knew, made at least $30 million off of Marilyn’s likeness and royalties,” Burns added. “This is probably not what Marilyn intended.”
Forget to Update Your Documents
Australian actor Heath Ledger died with a will, but he failed to update it to make provisions for the care of his daughter, born to actress Michelle Williams. Ultimately, his entire estate went to his parents and his sister, which launched a lengthy legal battle that ended up with the family setting up a trust for the daughter.
Make an Oral Promise
Before Marlon Brando died, he vowed to a housekeeper that she would inherit a property—without putting anything in writing. After lengthy litigation, the housekeeper got nothing. Anna Nicole Smith’s 90-something husband promised her that she would be the beneficiary of a trust after he died. A year into the marriage, Marshall Smith died without having amended the trust. His oral promises wound up in the U.S. Supreme court and Anna Nicole Smith ended up with nothing.
Don’t Finish What You Started.
Pop legend Michael Jackson had a will and a trust—that he didn’t get around to funding. Soul crooner Barry White was living with a long-term partner when he died in 2003. White hadn’t updated his will, which meant that his estranged second wife inherited his estate. His long-term partner received nothing. “Filing for divorce and getting divorced are two very different things,” Burns said. “If you are still married to your spouse when you die, even if you are in the midst of a bitter divorce, you are still married, and surviving spouses have marital rights to the estate.”
What’s the lesson? “Get good estate planning advice, follow it, and update your documents when things change,” Burns advised. “It’s important if you’re a celebrity—but it’s even more important if you’re not.”