10 Celebrity Estate Planning Mistakes
10 Celebrity Estate Planning Mistakes. Just like regular folks, celebrities flub their estate planning, costing their intended heirs money and/or grief. What’s different? Bigger dollar amounts and notoriety, mostly. A new book, Trial & Heirs, by probate litigator Andrew W. Mayoras and his estate lawyer wife, Danielle B. Mayoras, uses celebrity cliffhanger cases to dish out real-life advice.The mistakes celebrities have made run the gamut, from never writing a will (music legend Jimi Hendrix) to relying on a “letter of wishes” to give away belongings (Princess Di). So read on, and learn from their mistakes.
Celebrity: Jimi Hendrix
Mistake: Never writing a will.
Story: Music legend Jimi Hendrix died at age 27 in 1970 without a will. Under state law, his dad, Al, got everything, leaving his close brother Leon with nothing. Al built Hendrix’s musical legacy into an $80 million venture, but in his own will cut out Leon and his family, in favor of his adopted daughter through a later marriage.
Lesson: Even young rock stars aren’t immortal. Sign a will or living trust document.
Mistake: Relying on do-it-yourself documents.
Story: Chief Justice Warren Burger died in 1995 with a $1.8 million estate and a will of 176 words he typed up himself. There’s something to be said for brevity, but in this case, his family paid $450,000 in estate taxes, something that could have been easily avoided. And his executors had to pay to go to court to get approval to complete administrative acts, such as selling real estate, that typically a well-drafted will would have allowed without court approval.
Lesson: Even if you know a bit about the law, get an estate pro to write your will.
Mistake: Relying on a “letter of wishes” to give away belongings.
Story: At her death in 1997, Princess Diana left a detailed will, naming her sister and mother as executors. She also wrote a separate “letter of wishes” asking her executors, at their discretion, to divide her belongings among her sons and her 17 godchildren. But instead of getting stuff worth an estimated 100,000 pounds, each godchild got only a trinket.
Lesson: Don’t rely on executors’ sense of noblesse oblige; put bequests in your will or trust or in a signed, dated list.
Mistake: Not updating documents.
Story: When actor Heath Ledger died at age 28 in 2008, he had a will, but it was written three years before he died, prior to his relationship with Michelle Williams and the birth of their daughter, Matilda Rose. The will left everything to his parents and sister. When Ledger’s uncles raised fears that his father wouldn’t properly care for Matilda Rose, Ledger’s father said he would.
Lesson: When life changes, update your will, retirement accounts and insurance policies.
Mistake: Bad choice of executor.
Story: Tobacco heiress Doris Duke, who died in 1993 with a fortune estimated at $1.3 billion, named her butler as executor and as trustee for a huge charitable foundation. After the butler’s lifestyle and spending habits were called into question, he was removed from his duties by a probate judge, then reinstated by New York’s highest court. A settlement agreement created a board of trustees to manage the foundation.
Lesson: Don’t let the butler do it. Pick someone competent and trustworthy as your executor.
Mistake: Making oral promises.
Story: Angela Borlaza, actor Brando’s “major domo,” claimed Brando gave her the house she lived in, saying he had kept it in his name for tax reasons. She settled with the executors of his estate for $125,000. She also claimed Brando promised her continued employment with a company he owned, and settled that claim out of court.
Lesson: Oral promises won’t do; if you’re serious, execute the right written documents.
Mistake: Not telling your executor where to find your original documents.
Story: When Olympic sprinter Florence Griffith Joyner died at 38, in 1998, her husband couldn’t find her original will, and failed to file it with the probate court within 30 days of her death, as required by California law. Joyner’s husband and mother took disputes, including whether Joyner promised her mother could live in their house the rest of her life, to court. Joyner never filed the original will, and the judge eventually appointed a third party to administer the estate.
Lesson: Tell at least two people you trust where to find your original will. To be safe, keep two copies, and leave the original in your bank safety deposit box, or in your lawyer’s fireproof safe.
Mistake: Taking care of the dog, but not the grandkids, without getting her sanity certified.
Story: When she died in 2007, hotel tycoon Leona Helmsley’s will left most of her $5 billion estate to charity, created a $12 million trust for her Maltese dog, Trouble, and completely cut out two of her four grandchildren. The two stiffed grandkids sued her estate, claiming she wasn’t mentally fit to create her will and trust. The case settled, with Trouble getting $2 million, and the two grandkids sharing $6 million plus legal fees.
Lesson: If you’re older and cutting out relatives, have your lawyer conduct and sign a “mini mental evaluation” attesting to your competence.
Mistake: Naming wrong person as agent under power of attorney.
Story: In October 2009, socialite Brooke Astor’s son Anthony Marshall was convicted of fraud and grand larceny relating to his handling of his late mother’s estate. The 14 counts of which a New York jury found Marshall guilty included misusing his power of attorney over her financial affairs by giving himself a retroactive $1 million raise for managing her finances. Marshall denied wrongdoing and is appealing his conviction.
Lesson: Pick your agent with care, and require a backup agent to sign off, too, on major decisions.
Celebrity: Ted Williams
Mistake: Conflicting directions on burial wishes.
Story: In his will, baseball legend Ted Williams said he wished to be cremated. But his two children from a second marriage produced a grease-stained note saying he wished to be put in biostasis after his death, and they froze his body after his death in 2002. His eldest daughter fought to have his body unfrozen and cremated, but gave up the fight when she ran out of money.
Lesson: If you change your mind about your burial wishes, change your will by adding a codicil, or writing a new one.
Read more related articles here:
Celebrity Estate Planning Mistakes
Lessons To Be Learned From Failed Celebrity Estates
Also, read one of our previous Blogs at:
Which Stars Made the Biggest Estate Planning Blunders?
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