Estate Planning can be tricky. This is true for the Rich and Famous just like it is for the rest of us. However, by reviewing the poor on incomplete Estate Planning of several celebrities we can learn to avoid the mistakes they made. Here are the 3 biggest Estate Planning mistakes of the Rich and Famous
1. Too Busy to Get My Estate Planning Done
Everyone should have a basic Estate Plan in place that includes a Last Will and Testament, Durable Power of Attorney and a Living Will & Health Care Power of Attorney. However, many people are just too busy to get it done. The following Celebrities never got around to getting their Estate Planning completed. As a result, they had no control or say over who received their property which often resulted in long and costly legal fights among their heirs.
- Prince – left an estate of between $150 to $300 million
- Jimmy Hendrix – left an estate of about $80 million over which his siblings fought for nearly 30 years before a settlement occurred in 2015
- Howard Hughes – it was thought there was a will but it was determined to be a forgery resulting in his $1.5 billion fortune to be split between 22 cousins in 1970
- Pablo Picasso – died in 1973 and left a $30 million estate over which 6 family heirs fought about up to 1999
- Bob Marley – died at age 36 and left a large estate over which his family fought for more than 30 years
- Amy Winehouse – died in 2012 at age 27 from an accidental alcohol overdose and reportedly had an estate valued at $7 million
- Martin Luther King, Jr., – died without making a will; estate distributed to family members after dispute
- Abraham Lincoln – was assassinated in 1865; his estate was worth $85,000 at the time of his death (about $1.5 million in today’s dollars). It’s important to note that he was a lawyer and the only American President to die without a will;
Famous or not everyone should have a basic Estate Plan. According to a 2015 Rocket Lawyer survey, 64 percent of Americans don’t have a will. Not surprisingly, the number is higher for younger Americans (70 percent those aged 45-54) than for older Americans (54 percent those aged 55-64 do not have a Will). Of those surveyed without a will, most (60 percent) indicated they simply haven’t gotten around to making one yet while just over a quarter (27 percent) don’t feel that it’s urgent.
2. Leaving No Specific Instructions
Leaving simple instructions for your family to follow doesn’t take much time or effort. However, if your plans are constantly changing then the instructions that you leave could become complicated and lead to legal fights.
The tale of famous baseball player Ted Williams is well known. The size of the estate of the ballplayer often acknowledged as the greatest hitter of all time wasn’t really at issue when he died in 2002. Instead, Williams’ heirs fought over the several different instructions that Williams left about what to do with his body. One set of instructions specified his body should be cremated. However, another set of instructions stated that his body should be preserved cryogenically until the day came that it could be reanimated. The family fought about which instructions should be followed. Included in the court battle that occurred among his family were lurid details of Williams’ head being kept separate from his body.
Simple instructions in your Estate Planning can provide your family with the details they need to carry out your wishes. More importantly, these type of instructions can eliminate the possibility of a costly and time-consuming family fight.
3. Failing to Update Estate Plan
Whenever there is a major life change, it is time to pull out your Estate Plan and look it over to make sure it still does what you want it to do. Major life changes include: birth of an heir; death of an heir or appointee; divorce of an heir or appointee; or simply just the passage of a long period of time.
When actor Heath Ledger died in 2003, it was discovered that he had failed to update his will. The problem was that his current will was signed before his daughter was born. His will left his entire $20 million estate to his parents and his sisters. The good news is that despite the mistake, everything turned out as Ledger would have likely wanted. The family came together and announced that Ledger’s estate would go to Ledger’s daughter.
The famous are people too, with foibles and weaknesses just like the rest of us. However, because they are famous, their Estate Planning mistakes are open for all to see. You can do better and can avoid the 3 biggest Estate Planning mistakes listed above.