As I've mentioned before, we can all learn a thing or two from celebrity estate planning mistakes. Here are a few recent celebrity mistakes that can teach us some valuable lessons on estate planning techniques:
- Create an Estate Plan - As you likely have heard, Prince recently passed away with no estate plan, resulting in the laws of intestacy determining where his assets will go and Uncle Sam (and the lawyers) taking a significant portion of the estate. Could this have been avoided? Absolutely! Had Prince established an estate plan, he could have set forth exactly where he wanted the assets to go and utilized asset protection methods to minimize his tax liabilities. While you likely aren't in the same financial category as Prince, even for those with modest estates, an estate plan is always an important protection for yourself and your family.
- Ensure Your Estate Plan is Updated Regularly - While Whitney Houston did create an estate plan, she had not updated the plan since before the birth of her daughter, Bobbi Kristina. Upon her death, it was learned that Whitney's plan did not take into account whether Bobbi Kristina would be able to handle a significant amount of money at a young age, which resulted in her receiving a large amount of money that she was not able to properly manage. What Whitney should have done instead was make modifications to her plan after her child was born to take into account her maturity and life circumstances.
- Safeguard Your Estate Planning Documents - While Olympic track and field gold medalist Florence Griffith Joyner had a will, at the time of her passing, no one was able to locate it. With the absence of the original document, the document could not be probated and instead, the laws of intestacy controlled and resulted in years of litigation and family fighting over her estate. Not to mention significant losses of estate assets that instead were put toward attorney's fees. The valuable lesson in this? Make sure some trusted loved ones know exactly where to locate your estate planning documents!
- Don't Forget to Fund Your Trust - As you may have heard me say, a trust only works once it's "funded." As we can learn from the untimely death of Michael Jackson - who created a trust prior to his death but failed to "fund" it by not retitling his assets into the name of the trust - a trust without properly titled assets is not an effective trust. Instead, it results in assets needing to be probated - meaning a long time in court, high attorney's fees and a good change of family fighting.
Make sure not to fall prey to these celebrity estate planning mistakes. If you're looking for an estate planning and probate attorney to make sure your affairs are in order prior to your death, give me a call today and let's discuss. If you already have a plan, don't forget to meet with your estate planning attorney at least every 3 years to ensure everything continues to be in order. The last thing you want is to fall prey to these easily avoidable mistakes!