Celebrity estate plans often come with extraordinary wealth and considerable resources. However, celebrities are still not immune to estate planning issues and the consequences of poor planning. Several recent celebrity estate planning issues in the news have highlighted the importance of proper estate planning getting the professional advice that you need.
Think Carefully about Who is Involved in Your Trust
When Robin Williams passed away in August, he had created an irrevocable trust to provide for his three children. One of the main reasons to create a trust is to protect your privacy in addition to caring for your loved ones’ welfare; however, the trust documents were made public after one of the co-trustees also passed away. The other co-trustee had to make the documents public in order to petition the court to appoint a new person to the position.
The lesson to take away from Williams’ estate is to make sure that you know what will happen if key people involved in your estate plan are no longer able to fulfill their roles. In addition, you should consider the age and maturity levels of your children, and have an honest contemplation about whether they will be capable of making big decisions regarding money.
Plan for Second Marriages
Casey Kasem’s final months were full of tabloid fodder between his second wife and his children from his first marriage. His wife challenged the decision to make his daughter Kasem’s conservator and removed him from his nursing home in order to have control over his medical decisions. The dispute lasted for months over his medical care, and since his death in June his family has been fighting over his estate.
The lesson to take away from Kasem’s estate is to communicate. Try to foster a good relationship between the members of your family, especially if there is a subsequent marriage. If that fails be sure to clearly communicate to everyone in your family your wishes for your care and estate.
Don’t Lose Your Money to the IRS
One of Phillip Seymour Hoffman’s greatest fears for his children was that they would grow up as entitled, trust fund kids. In an effort to prevent that from happening, Hoffman gave his entire estate to his longtime girlfriend and mother of his children. Hoffman never created any trusts, never married, and his estate is going through public probate so there are no opportunities for his family to avoid estate taxes.
The lesson from Hoffman’s estate is to plan in advance and make sure that your wishes are reflected properly in your estate plan. Trusts can be created that dictate when and how your heirs can receive money so that your wishes are still reflected in addition to help your family avoid probate and major estate taxes.
Remember to Update Your Plans
Michael Crichton earned millions from authoring popular novels, but he died unexpectedly 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. It has resulted in a major court battle between his last wife, representing their child, and his adult children from his previous marriages.
The lesson to take away from Crichton’s estate is to update your plans regularly as your life changes. Whenever there is a marriage, divorce, new child, new business, or a loss be sure to update your estate plan to ensure that it still reflects your wishes accordingly.