Celebrities are not exempt from the fallout of poor estate planning.
They are household names.
Many people envy their careers, success, and lifestyles.
They seem to have it all.
According to a recent Reno Gazette Journal titled “Yes, even celebrities make estate planning mistakes,” they can just as easily lose it all.
Poor estate planning.
Celebrities make plenty of estate planning mistakes.
The good news is you can learn from them.
What are some of the most common mistakes they make?
Not creating a will.
Both Aretha Franklin and Amy Winehouse died intestate.
By failing to create a will, they left the distribution of their estates up to the laws of their states of residence.
This can be costly and time consuming.
Beyond asset distribution issues, without an estate plan who will rear you minor children?
Not utilizing a trust.
A trust can serve multiple purposes such as privacy and tax protections.
If you want to keep your assets and personal instructions for their distribution from the public, trusts can protect your privacy from curious individuals.
A trust also allows you to provide instructions in the event a beneficiary passes away shortly after receiving an inheritance.
In some cases, assets have been passed to ex-spouses after the death of a beneficiary.
A trust provides safeguards against such unintended outcomes.
Never reviewing you estate plan.
Michael Crichton, who wrote Jurassic Park, created an estate plan.
Unfortunately, he did not update his plan.
He died of cancer while his current wife was pregnant with their son.
This left his son out of his inheritance.
This wife sued the estate.
Although the son as was eventually included as an heir, it was costly in time, emotion, and money.
Failing to address potential disability.
Final wishes and asset distributions tend to be the main focus of estate planning for many.
There is more.
Incapacity planning is equally important.
Etta James is an example of insufficient planning in this case.
The blues singer signed a power of attorney giving authority to her son in 2008.
Her husband claimed she was incompetent when she made this decision.
The son was restricting money for medical care.
Eventually, the husband became a conservator, but he was limited to spending $350,000 for the care of his wife.
Quite a messy situation.
Do not make these estate planning mistakes.
Work with an experienced estate planning attorney to get (and keep) your affairs in order.
Reference: Reno Gazette Journal (November 14, 2018) “Yes, even celebrities make estate planning mistakes”