Celebrity Estate Planning Mistakes or Daytime Drama
Dying too young. Questionable intent. Lost fortunes. Ineffective plans. No, this isn’t the plot of a daytime drama. These are the root of some of the most famous celebrity estate planning mistakes we’ve seen in the 21st century. These problems aren’t limited to the rich and famous. Statistics show that 55% of all Americans die without a will. Even less have a comprehensive estate plan including a living trust, which protects you during life and avoids probate on death. Take note. We can all learn some important lessons from the following celebrity estate planning mistakes.
Lessons Learned from Rich & Famous
Go the Distance
Some celebrity estate planning mistakes revolve around the person’s inability to go far enough with their estate planning. Marilyn Monroe, actress, model, american icon… left 3/4 of her estate to her acting coach, Lee Strasberg. After Strasberg’s death, his share in Monroe’s estate passed to his third wife, who Marilyn didn’t even know. Had Marilyn set-up a living trust, she could have provided for Strasberg during his life and directed the remainder to anyone of her choosing. One could only guess who Marilyn would have left her fortune to. Happy Birthday, Mr. President..? Take me out to the ballgame, Mr.DiMaggio..? By failing to set-up and put her assets in trust, Strasberg’s wife was the primary beneficiary of Monroe’s estate.
Jim Morrison, iconic rock star and lead singer or self-declared “poet” of The Doors, known partly for his fascination in death with songs like “The End,” didn’t prepare financially for the afterlife. Like Marilyn, Morrison was also victim of one of the top celebrity estate planning mistakes by failing to create a comprehensive estate planning package. Morrison left his entire estate to his common law wife, Pamela Courson, who died shortly after Morrison with no will. Courson’s estate (including Morrison’s inherited share) then passed to her father – someone that by all accounts hated Morrison.
Dying Too Young
Some people die too young – plain and simple. There’s no planning for tragedy. But, there is a way to avoid adding to the heartache after you pass. Steve McNair had reached the pinnacle of the NFL and was still on top of his game when he was fatally gunned down by his then girlfriend in 2009. McNair left behind a wife and children, as well as a mother that he had been supporting. NcNair’s heirs suffered from one of the most common celebrity estate planning mistakes – perceived invincibility or thinking you’re too young too die. McNair’s lack of estate planning documents caused his estate to be submitted to probate. The consequences. McNair’s mother was displaced from the 45-acre home he had purchased for her. Additionally, McNair’s widow had to petition the Tennessee court over 3 years into the probate process to get $3.7 million to pay for back federal and state estate taxes due. Talk about a headache.
Generosity Killed the Estate
Some stars simply give too much. Sammy Davis, Jr., known for his music and rat pack days, was extremely generous – gifting away his entire estate to the point where he was insolvent when he died. Sammy’s lasting legacy for his family was an insurmountable tax bill that his heirs were unable to pay. His widow eventually had his body exhumed after learning of his financial status to recover $70,000 of jewelry from his body. Not necessarily the lasting impression Jr. wanted to leave.
More Money Means “Trouble”
Some celebrity estate planning mistakes revolve around the complexity and difficulty in planning for people that simply have too much. Leona Hemsley, widow of real estate mogul, Harry Helmsley, was a multimillionaire at the time of her passing. Leona created a pet trust funded with $12 million to care for her dog “Trouble” – at the same time cutting out two of her grandkids. A court battle ensued. Following the Uniform Trust Code, the New York judge viewed the trust corpus as an excessively large gift and reduced the fund to “Trouble” to $2 million. The disinherited grandchildren received a $6 million settlement. While no similar case has arisen in California, this raises interesting questions about whether a California judge would utilize the probate court’s equitable powers to change the terms of a pet trust.
You need to consult a qualified estate planning lawyer to address complex issues and avoid similar celebrity estate planning mistakes.
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