There is much to be learned from the mistakes of others and the celebrity world abounds with cautionary tales when it comes to estate planning. Even with all the financial resources available to them, celebrities can neglect the basics when it comes to protecting assets.
We come across sad tales all the time of “regular” people failing to take the proper steps to create an estate plan that assures their assets pass properly and that their heirs are spared from having to untangle costly legal messes.
Here are five important lessons you can learn from the mistakes of others:
1. Don’t die without a will. Celebrities are the same as most people when it comes to thinking they will live forever – but they differ greatly in that they usually have a lot more money to leave behind. Actor Heath Ledger died without updating his will to include his daughter; all his assets went to his parents and siblings.
2. Equal isn’t always the same. Thinking she was treating her two children equally in her bequest, one woman left her home to her son and her investment portfolio to her daughter. Unfortunately, when she died, there was a sizeable tax liability on the home, and the only assets available were from the portfolio, leaving the daughter shortchanged.
3. Name the right executor. Naming a friend as executor is fine, but not always the best option. One woman named her best friend as her executor, but they happened to be the same age. When the woman died at age 86, her friend followed a few weeks later and no one was left to serve as executor since she hadn’t named a backup.
4. Provide for your children from a prior marriage. A man with children from a first marriage left all his assets to his second wife; when she died, all of those assets went to her children, leaving nothing for his children. Instead, he should have provided for them directly or placed his assets in a trust so they could pass to his children after her death.
5. Promises don’t count. Before he died, Marlon Brando allegedly promised his house to his caregiver but did not record that promise in his will. She did not get the house. If you want to leave something to someone, you need to put it in writing in your will or a trust.
Don’t make the same celebrity estate planning mistakes. For more information on protecting yourself and your family, call our office to schedule a time for us to sit down and talk about a Family Wealth Planning Session, where we can identify the best ways for you to ensure the security of your loved ones.