Estate Planning Lessons Learned from Celebrities
Celebrities appear to live fantastic lives full of glitz and glamour, and have all the access to professional advice that money can buy. However, despite having access to this top-notch advice, they still make estate-planning mistakes that highlight the consequences of ignorance and bad planning. By looking at several recent celebrity deaths and their resulting estate issues one can learn a lot about what not to do.
Always think critically about the individuals involved in your trust. Robin Williams recently passed away and had created irrevocable trusts for his 3 children, presumably to support them as they grow up while simultaneously protecting their privacy. Unfortunately, Mr. Williams had failed to nominate successor trustees. This oversight resulted in the private details of his trusts being exposed to the public due to a petition filed with the court for a replacement trustee following an original trustee’s death.
Preserve your estate for your family and minimize the amount the IRS will take. Phillip Seymour Hoffman desired to prevent his children from becoming spoiled “trust fund kids” and so he bequeathed via a 2004 will his entire estate to the mother of his children against the urging of his attorney to create trusts. Hoffman’s girlfriend has since been subjected to probate proceedings whereby Hoffman’s entire estate has become part of public record, and the proceedings will cost close to 10% of his entire estate.
Ensure that your estate plan is updated frequently and reflects your current wishes. Michael Crichton, famous author, passed away with a multi-million dollar estate from his best selling novels. Unfortunately, he passed away while his fifth wife was pregnant with his son and never updated his estate plan to account for this new addition. Crichton’s estate plan had explicitly excluded any potential future children from inheriting from his estate, leaving his wife to enter into a legal battle with his eldest daughter in an attempt to provide for their son.
Always protect your children from a first marriage by planning for a second marriage. The second wife of radio DJ, Casey Kasem, brought legal proceedings against Kasem’s adult daughter to have her removed from his health care documents. This battle during Kasem’s last days are likely only a precursor to a potential fight between Kasem’s children and his second wife concerning his large estate.
The lessons learned by these celebrities are many, however they can all be boiled down to these simple points: begin your planning now, plan for the unexpected, work with professionals to protect your wishes, and review your plans regularly to ensure that it is still in line with your wishes.
Please note that this article is a general summary of law and omits many important details, footnotes, and caveats. It is no substitute for legal advice from a lawyer based on your particular circumstances.