By Dan A. Baron, Baron Law LLC
When was the last time you reviewed your estate plan and the laws it must follow? If you’re like most people, you’ve probably put what you’ve worked your whole life on to build on the back burner. Some of America’s richest celebrities have made the same mistake. Over the past few decades, these top celebrities have made horrific mistakes due to improper planning that could have been avoided.
By far the biggest mistake was not planning at all. This is exactly the mistake made by the legendary artist Pablo Picasso. When Picasso died in 1971, he left an estate worth $173 million, however, he left no will to determine what would happen to his legacy, including his legendary paintings. This created a huge tax bill on his estate, which had to be paid by handing over many of his artworks to France. A number of lawsuits have been going on around the estate over the years, culminating in a settlement. The end result was that Picasso lost more than $100 million in estate taxes and legal fees.
While securing a will may seem like common sense, famed songwriter Prince didn’t achieve such obvious common sense when he died in 2016. This is called a dying “interstate” and it causes the state to decide where your assets go. Not only does this mean that someone to whom you never intended to give anything could inherit your assets, but it can also take a long time for the state to determine what will happen to your assets. It can be extremely poisonous in the process. Like Picasso, Prince lost millions in estate taxes and legal fees. Additionally, his family spent thousands arguing over who managed his property.
Florence Griffin Joiner
Along with last wills and wills, it is important to have a copy of your will in a known location. Most estate planning attorneys keep a copy of their client’s estate plan, which comes in handy when a person dies and cannot find their will. However, Olympic gold medalist Florence Griffin Joiner was not so lucky when he died in 1998. Joiner wrote a will; however, no one knows where she put it. Without a will, her family ended up in an estate-planning battle that took four years to wrap up. If a lawyer has a copy of her will, all of these challenges are avoidable for the families and beneficiaries involved.
Philip Seymour Hoffman
Hoffman didn’t want to spoil his children in the event of his untimely death, however, he didn’t make credit. After his death in 2014, in accordance with his wishes, his entire estate was left to the mother of his children. However, due to his lack of trust, a huge estate tax was incurred. With the help of an estate-planning attorney, Hoffman could have realized that instead of ignoring establishing a trust, he could have created a personalized trust to determine when and how his children would inherit the property. This would have saved his beneficiaries a lot of tax and stress.
When it comes to trusts, not funding a trust is a common mistake, and it happens to be a major mistake Michael Jackson made in his estate planning. When Jackson died in 2009, he left a huge estate worth $600 million to his beneficiaries. However, due to a lack of funds from his trust, the estate remains open for business. Without a well-funded trust fund, Jackson’s beneficiaries would only encounter problems, including multiple trips to probate court, which cost them money. Ultimately, Jackson’s estate could not be finalized without court approval. Imagine how easy this would be for everyone if it were just to fund the trust.
Another pernicious mistake in estate planning is not keeping your plan up to date. Singer Barry White made that mistake, and when he died in 2003, his family found themselves embroiled in a legal battle. White is separated but not divorced from his wife, who inherits everything while his current girlfriend of many years and his children have nothing. When divorcing, it is important to seek legal advice to ensure that all changes to the estate plan are accurate.
It is not only important to ensure that people are properly removed from your estate plan when necessary, but it is also important to ensure that people are properly added to your estate plan. This was a problem when Heath Ledger died in 2008, as his will hadn’t been updated since his daughter was born. Ledger’s entire estate was left to his parents and siblings, who luckily gave everything to Ledger’s daughter. Not everyone will be so lucky in this situation, so it’s important to update your estate plan as life circumstances continue to change.
Finally, it’s also important to make sure your estate planning is accurate to ensure you get the end-of-life care you want. When Ted Williams died in 2002, he hoped to be cremated. However, a conflicting legal document said he wanted his body to be cryogenically frozen when he died. This led to legal battles between family members, which only ended when one party could no longer afford the ongoing legal fees. Again, it’s important to keep these details up to date in your estate plan, not only to ensure your wishes are met, but to keep the family as stress-free as possible during this time.
Don’t let what you’ve built with your life turn into a story similar to these famous people. For free analysis and consultation, please contact Baron Law LLC at 216-573-3723.
Baron Law LLC
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5005 Rockside Road
Independence, Ohio 44131
The views and claims expressed above are those of the author and do not necessarily reflect the views and claims of ScripType Publishing.