EVEN WEALTHY CELEBRITIES MAKE ESTATE PLANNING MISTAKES

Having money doesn’t mean that you have prepared your estate for your heirs. These are just a few examples where the correct legal advice could have saved millions of dollars, time, and heartache.

Prince R. Nelson, commonly known as, Prince; his mistake was not having a Will or estate plan.

The April 2016 death of entertainer Prince wasn’t just shocking because he was only 57 years old. Many people were surprised the “Purple Rain” singer had no will. It has taken a Minnesota judge over one year to make the decision on how to distribute Prince’s estimated $300 million estate among six siblings. Other potential heirs have surfaced, too, including a federal inmate claiming to be Prince’s son.  Not preparing a will is a basic mistake.

Whitney Houston; her mistake was not updating her Will.

Songstress Whitney Houston had a will when she drowned in February 2012, but it was quite outdated. Drawn up a month before the 1993 birth of Houston’s only child, daughter Bobbi Kristina Brown, the will was never revised — not even as the singer’s fortune climbed to $20 million. Bobbi Kristina was 18 when her mother died, and under the will’s terms was to receive 10 percent of the estate — $2 million — when she turned 21 and the rest later. By not updating her will, Houston failed to consider whether her daughter was mature enough to handle millions of dollars.

James Gandolfini; his mistake was not finishing his estate planning.

Sopranos actor James Gandolfini was reportedly worth $70 million when he died in June 2013 of a heart attack in Rome. His will provided for his widow, daughter and two sisters. But Gandolfini didn’t use the proper documents required for the size of his estate. The result: The estate ended up paying federal and state estate taxes at a hefty rate of 55 percent. Gandolfini made a will before leaving on vacation but did no planning beyond that. The majority of the taxes paid by the estate could’ve been avoided if he’d completed the necessary documents prior to his vacation.

Marlon Brando; his mistake was making oral promises.

Actor Marlon Brando had an estate plan for his $100 million fortune when he died in July 2004. Problem was, his written plan excluded certain oral promises he allegedly made to his long-term housekeeper, Angela Borlaza. She filed two lawsuits claiming she was illegally kicked out of Brando’s California home. The former maid said the house was a gift to her from Brando. The actor, though, never completed the paperwork to transfer Borlaza legal ownership. In court, she sought $627,000 — the market value of the house — plus $2 million in punitive damages. The case settled for $125,000.

Michael Jackson; his mistake was failing to fund a Trust.

Superstar Michael Jackson’s death in June 2009 touched off a string of ongoing court battles over his estate, now worth $600 million. One of Jackson’s biggest estate planning missteps was creating a trust — and then failing to fund it. Absent a properly funded trust, Jackson’s beneficiaries have wound up numerous times in probate court, the estate is still open, and all things concerning it are subject to court approval. Probate court is public, expensive, time-consuming and more prone to cause feuds between potential heirs.

Heath Ledger; his mistake was omitting a child.

After actor Heath Ledger died in January 2008, reports surfaced that he had failed to update an old will created before his daughter was born. As a result, Ledger’s entire $20 million estate went to his parents and three sisters. A will should always have language that references any of your natural born children, adopted or stepchildren, and any offspring you may have in the future. Fortunately, relatives revealed in late 2008 that all of Ledger’s money would go where he would have wanted — to daughter Matilda Ledger, whose mom is actress Michelle Williams.

Philip Seymour Hoffman; his mistake was failing to use Trusts wisely.

Academy Award–winner Philip Seymour Hoffman was determined not to let his children turn into spoiled “trust-fund kids,” so he chose not to create a trust. When he died in 2014, his entire $35 million estate went to the mother of his three children, Marianne O’Donnell. That might not have been so bad, except that Hoffman’s decision meant his beneficiaries also inherited a whopper of an estate tax bill. Hoffman erred in thinking that trusts would automatically create entitled or lazy trust-fund kids. Trusts can be customized, and Hoffman could have made specific stipulations about when, how and under what circumstances his kids inherited money — including a provision that the children work.

Florence Griffith Joyner; her mistake was keeping her Will’s location secret.

Olympic gold medalist Florence Griffith Joyner had a will when she died in September 1998. The problem: No one knew where “Flo Jo” kept it. It threw her relatives into an estate planning battle because they couldn’t find her original will. And without the will, it took four long years to close her probate estate.

These are all examples to demonstrate that even celebrities make mistakes when it comes to estate planning. Let our experienced attorneys draft and look over any estate planning documents that you may need. This article is for informational purposes only and does not constitute legal advice or representation. If you have any questions or want to set up a free consultation, please feel free to call us at 702-448-4962.