Sometimes it seems that celebrities have it all – fame, fashion, and fortune. However, having money and an entourage of lawyers and accountants has not stopped some celebrities from making estate planning mistakes. In this article, we will look at four celebrity estate planning mistakes that cost their heirs dearly.
Failing to Leave a Will
Most people have heard of a Last Will and Testament. However, only about 40% of Americans have taken the important step of writing their Will. One well-known billionaire was not in that group.
When Howard Hughes died in 1976, he left an estate worth about $11 billion by today’s standards. Because a valid Will could not be found, his estate passed to heirs according to intestacy laws. However, estate-related litigation carried on until 2010.
Had Mr. Hughes talked to an estate planning attorney, his fortune could have gone where he wanted, to people he cared about. It’s also unlikely that his estate would have taken so long to settle.
Failing to Update an Estate Plan
It’s important to make sure that your important documents reflect your current life situation. When actor Heath Ledger died in 2008, he left behind a young daughter, Matilda.
Ledger had prepared an estate plan several years before her birth leaving everything to his parents and siblings. When he died, that plan was still in place and Matilda received nothing. Fortunately, Ledger’s family willingly gave the money from the estate to Matilda.
As your life changes, make sure that your estate plan changes also.
Hiding Estate Planning Documents
It’s difficult, but grieving families have to start thinking about probate soon after a loved one dies. What can make the process even more difficult is when a Will comes up missing. Yet, this is exactly what Florence Griffith-Joyner’s family faced after her premature death in 1998.
Although there was evidence that Ms. Griffith-Joyner had written a Will, no one could locate it. Ms. Griffith-Joyner’s estate was held up for years due to disputes between her husband and her mother.
To avoid this problem, make sure someone knows where your original Will is kept.
Ignoring the Benefits a Trust Can Offer
Trusts are not just for the rich and famous. However, they definitely can help people with high-net-worth estates or complicated family situations. Unfortunately for actor Philip Seymour Hoffman’s family, he did not create a trust before his death in 2014.
Instead, he chose to leave his entire $35 million estate to the mother of his three children. He felt that setting up trusts for his children would turn them into “trust-fund kids.” While this might have been well-intentioned, he inadvertently set his heirs up for a very large estate tax bill.
A trust could have helped Hoffman provide for his family without spoiling them. Some trusts also pass fortunes to heirs while reducing the tax bill. Would a trust offer benefits to you and your heirs?
You Can Avoid These Estate Planning Mistakes
Talk to an experienced Alabama estate planning lawyer to set up an estate plan that meets your needs.
Attorney Bruce Adams assists clients like you with their estate planning matters. Call us at 256-237-3339 to schedule an appointment. We are located in Anniston, Alabama, but help clients in surrounding Calhoun, Cleburne, Etowah, and St. Clair Counties.