Are you failing your family the way these 4 celebrities failed theirs?
These four celebrity estate planning fiascos offer lessons about how to handle your own planning and legacies.
1. Pablo Picasso – The great Dada artist died in 1973 at 91 without a will, a status referred to as “intestate.” Of course, Picasso isn't the first, or the last, celebrity to die intestate. However, after he died, his six heirs fought for six years over the wealth of assets he left behind. One lesson for us: Make sure you have your estate planning documents in place before you go.
2. Heath Ledger – It was a huge surprise, and disappointment, to millions of adoring fans when Heath Ledger died in 2008 at the age of 28. He did leave a will. Unfortunately, he didn't update the will after the birth of his daughter. Fortunately for his daughter, the family decided to include her in the inheritance, which proves that sometimes people do the right thing. But what if his family had insisted instead on the terms of Heath’s will? One lesson for us: When there’s a big change in your family situation (or when you have a life changing epiphany about your core values and legacy), update your plans accordingly. Do not assume that just because you’re young and healthy that you will have lots of time to get things in order. Do not assume that, since you have a plan in place, it’ll automatically update to match your current desires and needs.
3. Philip Seymour Hoffman – Actor Philip Seymour Hoffman didn't want his children to grow up as “trust-fund babies.” Fair enough, but he decided to leave his inheritance with his girlfriend, counting on her to care for his children on his behalf. The problem: there was no guarantee that would happen. Since the two weren't married, Hoffman's estate was hit with a huge tax. One lesson for us: A trust that includes your guidance about the proper use of the funds is better than hoping for the best with one that leaves your wishes undefined.
4. Tom Clancy – Author Tom Clancy left behind a huge fortune, but his estate planning documents weren't clear about some of the important details. These issues led to drama for family members. One lesson for us: the more complicated your family, your assets, and your business dealings are, the more accurate, precise, and proactive you need to be in working with us on your estate plan.
Whether you’re just starting to explore the need for estate planning or you’re a seasoned veteran with a well-worn trust binder, we should all remember a few key points:
- Have estate planning documents in place, even if you’re young and healthy and think you’ll have plenty of time to get things in order later.
- When there’s a change in your family situation (marriage, birth, or death) or if you’ve changed your mind about something, update your plans accordingly. Do not assume that, since you have a plan in place, it’ll automatically update to match your current desires and needs.
- Provide guidance to your family about how you’d like them to use their inheritance. Do not rely on hope or verbal instructions. The best place for guidance is in your trust or in an intent letter that can help your trustee manage your trust.
- If you’re well-off or have complex assets, you need to work with your trust lawyer in a more proactive way to avoid potential missteps while still achieving your goals.