Many believe a substantial portfolio is necessary for an estate plan, but your most valuable asset is your autonomy over your own decisions. About 9 years ago, I had a client whose husband suffered a massive stroke. While he spent months in rehab unable to speak, she was unable to speak for him. Credit card companies, his car lease company and other impersonal institutions refused to communicate with her. She was frantic and helpless. Some easy estate planning would have provided her with the necessary documents to speak on his behalf.
Everyone needs a plan in case the unthinkable happens. Our clients range from Uber drivers to the uber-wealthy because an “Estate Plan” protects more than just money. We all must prepare for any potential incapacity and to consider everything from who will handle your healthcare to who will pay your credit cards if you cannot.
Frequent discussions with the public center around the topic of ‘Probate Nightmares.’ Recent examples, which may be familiar, highlight what should be avoided and serve as a reminder of the essential steps everyone must take.
No Will at All: this is called “an intestate estate” and is determined according to state law. The court may make decisions regarding who will receive your assets. The rockstar Prince died without a will. His full sister, five half-siblings, and hundreds more individuals claimed they were related. The IRS fought with his family for over 6 years to determine the value of his taxable estate. Lesson learned: avoid a nightmare by consulting with a trusted attorney to plan for the future.
Improperly Executed Will: Aretha Franklin’s family assumed she had no will, but then a few handwritten documents were found, and her attorneys found a draft “Will of Aretha Franklin” that was never signed. Not one of the four alleged wills was completed according to state law. This forced her family and assets to remain stuck in court almost four years following her passing, awaiting a judge’s decision. Lesson learned: make sure your documents are properly signed and executed according to state law.
Choosing the Right Fiduciaries: Jerry Garcia’s family dealt with a complex will and a complex probate estate. He had named his 3rd wife the Executor (or Personal Representative) to be responsible for ongoing alimony payments to his second wife. This was not a wise decision and led to a family court battle. Lesson learned: choose the right people for the right positions involved in your future.
Deciding Who Gets Your “Stuff”: Robin Williams had a well-prepared estate plan, but his memorabilia, including an Academy Award, 6 Golden Globes and multiple Emmys, led to a bitter family feud. Lesson learned: personal property has value, whether emotional or financial. Don’t let your family fight over your belongings.
Although each of the celebrities discussed likely had agents, managers, and attorneys heavily involved in their careers, none had an ideal estate plan.
Given the ever-changing laws and the complexities often inherent in today’s families, everyone—famous or not—needs to take time to protect their loved ones with a complete, updated estate plan.
