by Dan A. Baron, Baron Law LLC
When is the last time you reviewed your estate plan and the laws it must follow? If you are like most people, you’ve probably placed what you’ve spent a lifetime trying to build on the back burner. Some of wealthiest celebrities in America are making the same mistake. In the last several decades, these top celebrities made terrible mistakes due to improper planning that could have been avoided.
By far, the biggest mistake that can be made is having no plan at all. This is exactly the mistake that legendary artist Pablo Picasso made. When Picasso passed away in 1971, he left behind an estate worth $173 million, however, he left no will to determine what would happen to his estate, including his legendary paintings. This created a large tax bill on his estate, which had to be paid for by giving up many of his artworks to France. There were many lawsuits that went on for years over this large estate which eventually ended in a settlement. The end result is Picasso lost over $100 million dollars in estate taxes and attorney fees.
While it may seem like common sense to make sure to create a will, famous song writer Prince fell short of such obvious common sense in 2016 when he died. This is called dying “interstate” and it results in the state deciding where your assets go. Not only does this mean that people you never intended to give anything to may inherit your assets, but it also may take an incredibly long time for the state to determine what will happen to your assets. The process can be extremely drug out. Like Picasso, Prince lost millions in estate taxes and attorney fees. Moreover, his family spent thousands disputing who would administer his estate.
Florence Griffin Joyner
In parallel with a last will and testament, it is also critically important to have a copy of your will in a known location. Most estate-planning attorneys will keep a copy of their clients’ estate plans which comes in handy when a person’s will cannot be located when they pass away. However, Olympic gold-medalist Florence Griffin Joyner wasn’t so lucky when she passed away in 1998. Joyner had written a will; however, nobody knew where she kept it. Without the will, her family ended up in an estate-planning battle which took four years to end. Had an attorney had a copy of her will, all of these challenges could have been prevented for the family and beneficiaries involved.
Phillip Seymour Hoffman
Hoffman did not want to spoil his children in the circumstance of his untimely death, however, he failed to make a trust. With his passing in 2014, his entire estate was left to the mother of his children, according to his wishes. However, due to his lack of trust, there was an incredibly large estate tax. With the help of an estate-planning attorney Hoffman could have realized that instead of neglecting to make a trust he could have created a personalized trust to determine when and how his children would inherit money. This could have saved his beneficiaries a large sum of taxation and stress.
Speaking of trusts, not funding a trust is a common mistake that can be made, and it just so happens to be the major mistake that Michael Jackson made in his estate planning. When Jackson died in 2009, he left a prodigious estate, currently worth $600 million, to his beneficiaries. However, the estate is currently still open today due to the lack of funding of his trust. Without a properly funded trust, Jackson’s beneficiaries have had nothing but issues including ending up in probate court multiple times, which is costing them money. Ultimately, nothing can be finalized in Jackson’s estate without court approval. Imagine how much simpler this could have been for everyone if the trust had simply been funded.
Another detrimental mistake in estate planning is not keeping your plan up to date. Singer Barry White made this mistake and when he passed away in 2003 his family found themselves in a legal battle. White was separated but not yet divorced from his wife, who inherited everything while his current girlfriend of years and his children received nothing. When going through a divorce, it is extremely important to seek legal consultation to ensure all changes are accurately made to estate plans.
Not only is it important to ensure people are properly removed from your estate plans when necessary, but it is also important to ensure that people are correctly added to your estate plans. This was an issue when Heath Ledger passed away in 2008 as his will had not been updated since the birth of his daughter. Ledger’s entire estate was left to his parents and siblings, who fortunately gave everything to Ledger’s daughter. Not everyone would be as lucky in these circumstances so it is extremely important to update estate plans as life situations are constantly changing.
Finally, it is also important to ensure that your estate planning is done accurately to make sure you receive the end-of-life care that you wish. When Ted Williams passed away in 2002, he wished to be cremated. However, there was a conflicting legal document saying that he wanted his body to be cryogenically frozen when he died. This led to a legal battle amongst family members which only ended when one side could no longer afford the continuing legal bills. Again, it is so important to have these details up to date in estate plans not only to ensure your wishes are granted but to keep this time as stress-free as possible for family.
Don’t let what you’ve spent a lifetime building become a story that parallels one of these celebrities. For a free analysis and consultation, contact Baron Law LLC at 216-573-3723.
Baron Law LLC
Crowne Centre, Suite #600
5005 Rockside Road
Independence, Ohio 44131
Opinions and claims expressed above are those of the author and do not necessarily reflect those of ScripType Publishing.