Famous People and Estate Planning Disasters
If you think all the well-to-do or celebrities have a magnificent estate plan in place, think again. Many wealthy individuals and famous people failed to properly organize and plan their estates. The result? Estate planning nightmares that lead to millions of dollars being gobbled up by Federal estate taxes, unnecessary legal fees, and lengthy court battles between family members. Below are three prime examples of missed opportunities, in terms of proper estate planning:
Steve McNair
Steve McNair was a successful NFL quarterback who died suddenly and unexpectedly. He did not have a will or any estate planning documents when he passed away. He left behind a wife and four children. An all too common problem is that two of his children were from a prior relationship. This can create conflict because an estate that is divided by the laws of intestacy are not concerned about fairness or equity. Intestacy laws are a set of general rules regarding the division of estates that lack the guidance of a will. This means his children may receive their entire inheritance when they are only 18 years old, which could result in irresponsible uses of those funds (imagine being 18 and suddenly inheriting potentially millions of dollars). If McNair had a will or a living trust, it’s possible that he could have avoided probate, and allowed his kids to receive their inheritance when he determined that they were old enough to receive it and use the funds properly.
Zsa Zsa Gabor
Zsa Zsa Gabor’s family is in the midst of a legal battle over the ailing star’s medical care and finances. Gabor did not have a living trust, which means there was no direction on who should be the guardian of her estate if she is incapacitated. Unfortunately, such a scenario is common. Gabor is bedridden and both her husband and daughter applied to be her guardian. Her husband was temporarily named guardian but Gabor’s daughter is challenging the designation and has demanded an accounting of his Gabor’s estate out of fear that Gabor’s husband is spending the funds on lavish parties, according to estateofdenial.com. All of this could have been avoided had Gabor met with an estate planning attorney and created even a simple interim guardian document or revocable trust.
Marilyn Monroe
At the young age of 36, Marilyn Monroe took her life. She had a will, but left only $100,000 in trust to support her mother. She had no other estate plan or trust in place. The result? Well, royalties and licenses that she wanted to be given to charitable causes never occurred. Furthermore, her debts and Federal estate taxes led to a 55 percent decrease in her net estate. This is a prime example of why having a simple will isn’t enough to protect your estate. Unfortunately, many people, even today, fall for the same trap – they have a will they purchased from Legal Zoom or another web site and think that their loved ones are fully protected. Sadly, once they pass away, their loved ones will realize just how inadequate a simple will is, especially if the decedent had a substantial estate. You need to have a detailed, specific estate plan to properly protect your assets.
So what is the central point of these three stories? First, we never know when the end will come. Your life could come to an end tomorrow. That’s just a reality we all have to grapple with. Hence, the necessity of taking action NOW to properly plan your estate so your loved ones have guidance on how to distribute your estate and avoid going through probate and/or paying unnecessary estate taxes. To assist in this endeavor, you should speak to an experienced estate planning attorney. When you meet with an estate planning attorney make sure they are prepared to help you plan for next month’s planning instead of just focusing on 20 years down the road. The time and money you spend on an estate planning attorney now could save your loved ones even more money (and heartache) later on if there isn’t proper directives in a well-drafted will and/or living trust.