With the death of Elizabeth Taylor, we are all reminded that planning ahead is essential. Given the fact her estate was worth $600 million to $1 billion, it’s a good thing she planned ahead.
Estate planning lessons we can learn from celebrities include the following:
1. Doing Nothing: Jimi Hendrix died without anything in place. As such, his estate was administered by a stranger (versus someone that he could have chosen), and court battles continued for almost 30 years after he died.
2. Do It Yourself: Former Supreme Court Justice Warren Burger made his own will. He left out many critical provisions (it was only 176 words altogether), and the mistake cost his family thousands of dollars to untangle the mess.
3. Failing to Update Your Documents: Heath Ledger had estate planning documents in place, but they did not address his daughter. She was born after he created the documents. As such, by failing to include her, there were some family fights concerning the omission. Anna Nicole Smith had the same problem.
4. Using Shortcuts: Princess Diana did not properly gift assets within her estate planning documents. She instead used a “letter of wishes” that she made herself. That was not the proper way to gift personal property. Of course, every state and jurisdiction has its own rules on such gifts.
5. Forgetting to Inform People: If you have a plan in place, you have to tell people where it is! Keeping it a secret won’t do you any good. Famous Olympian Florence Griffith-Joyner did not tell her family where her documents were. As such, her estate was stuck in the court system for about 4 years.
6. Failing to Complete the Job: We recently learned that while Michael Jackson had a decent estate plan in place, he did not properly fund the trust in many cases. As such, many assets are still going through the court system. This is one of the biggest reasons trusts fail. “Having” a trust is nice, but using it properly is a different story.
7. Lack of Clarity: Some people leave large sums of money to one child or another. Whitney Houston’s father named her as the beneficiary of his life insurance policy, but it wasn’t clear if he wanted her to keep all the money or repay certain debts.
8. Who’s In Charge? Groucho Marx had nothing in place which lead to a huge court battle between his family and Groucho’s significant other. When Groucho got sick, people fought over who would be his “conservator” and therefore in charge of his estate.
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