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As one passes away, specifically celebrities, the immediate question asked “who is entitled to the icon’s estate?” Thanks to poor planning, celebrities oftentimes do not properly arrange for the disposal of their estates leading to future mishaps. According to a recent article via RecordOnline, here are a few examples and lessons we can all learn about estate planning from a few recently departed celebrities:
Williams created an irrevocable trust to provide for his three children. One of the main reasons behind creating a trust is to protect your privacy in addition to caring for your loved ones' welfare. Unfortunately, Williams’ trust documents were made public because one of the co-trustees he named passed away. The other trustee petitioned the court to appoint a successor co-trustee, making the trust a public document.
Lesson: Have a back-up plan. Make sure you know what will happen if key people involved in your plan can no longer fulfill their roles. Naming back-up trustees would have saved Williams’ trust from becoming public.
There was plenty of conflict between his second wife and his children from his first marriage in the final months of his life. His wife challenged the decision to make his daughter Kasem's conservator, and removed him from his nursing home to take control over his medical decisions. The dispute over his care lasted for months. Since his death in June, his family has been fighting over his estate.
Lesson: Appoint in advance who will be in charge of your life if you are incapacitated, as well saying where your assets go on death. Having good communication is key. Build good relationships among the members of your family. Using trusts as opposed to wills is highly recommended if any family members are disinherited.
Phillip Seymour Hoffman
One of Hoffman's greatest fears for his children was that they would grow up as entitled, trust fund kids. To avoid that Hoffman gave his entire estate to his longtime girlfriend and mother of his children. He never created any trusts, never married, and his estate is going through public probate, so there are no opportunities for his family to reduce or avoid estate taxes.
Lesson: Plan in advance and make sure that your wishes are reflected properly in your estate plan. Your trust may decide when and how your heirs may receive money, and at the same time avoid court (probate) and take advantage of estate tax savings techniques.
Crichton unexpected death occurred while his fifth wife was pregnant with their child. Crichton never updated his estate plan to include his newest child, and the previous version of his plan specifically excluded future children from inheriting. A major court battle ensued between his last wife, representing their child, and his adult children from previous marriages.
Lesson: Update estate plans regularly as your life changes. If there is a marriage, divorce, new child, new business, or a loss, be sure to review and update your estate plan to reflect your new wishes accordingly.