Did Luke Perry Plan His Estate?

Fifty-two-year-old Luke Perry suffered a serious stroke recently and was hospitalized under heavy sedation. A few days later, his family made the decision to remove life support, when it was apparent that he wouldn’t recover and after a reported second stroke.

Forbes reports in its article, “Luke Perry Protected His Family With Estate Planning,” that he was surrounded by his children, 21-year-old Jack and 18-year-old Sophie, his fiancé, ex-wife, mother and siblings, when he passed.

The fact that the hospital let Perry’s family end life support, means that he likely had executed the proper legal documents, so his family could make the decision. Those documents were most likely an advance directive or a power of attorney. Without these legal documents, Luke’s family may have needed to obtain an order from a probate court to terminate life support—a public and emotional process that would have prolonged his suffering and made it even more stressful for his family.

Perry reportedly created a will in 2015. He left everything to his two children. According to a family friend, Perry discovered he had precancerous growths following a colonoscopy. This motivated him to create a will to protect his children.

Luke Perry had a reported net worth of around $10 million, so he may have created a revocable living trust, in addition to a will. If he had only a will, then his estate will have to pass through probate court. However, if he had a trust, and if his trust was properly funded (he transferred his assets into his trust prior to death), then his assets can pass to his children without court involvement.

One question is whether Perry would have wanted something to go to his fiancé, therapist Wendy Madison Bauer. Since his will was drafted in 2015, he likely did not include Bauer at the time. If the couple had married prior to his death, then Bauer would typically have received rights as a “pretermitted spouse.” These rights wouldn’t have been automatic, but would have depended on the terms of his will and/or trust, as well as whether the couple signed a prenuptial agreement that addressed inheritance rights. However, if the documents failed to show an intent to exclude Bauer as a beneficiary, then she would’ve been entitled to one-third of his estate under California law, if they’d been married.

Because Perry died before he married Bauer, she’s not entitled to inherit anything through his will or trust, assuming his children are his only beneficiaries, and no later will, trust, or amendment is found that includes her. Perry may have left money for Bauer in other ways, like life insurance, a joint bank account, or an account with a TOD (Transfer on Death) or POD (Payable on Death) clause.

Luke Perry’s death provides an important lesson: don’t wait until you’re “old” to do your estate planning. Perry’s 2015 cancer scare made him take action, which simplified the process for his family to terminate life support and will likely make the process of dividing his estate easier.

Reference: Forbes (March 8, 2019) “Luke Perry Protected His Family With Estate Planning”

How Do I Plan for a Blended Family?

A blended family (or stepfamily) can be thought of as the result of two or more people forming a life together (married or not) that includes children from one or both of their previous relationships, says The Pittsburgh Post-Gazette in a recent article, “You’re in love again, but consider the legal and financial issues before it’s too late.”

Research from the Pew Research Center study reveals a high remarriage rate for those 55 and older—67% between the ages 55 and 64 remarry. Some of the high remarriage percentage may be due to increasing life expectancies or the death of a spouse. In addition, divorces are increasing for older people who may have decided that, with the children grown, they want to go their separate ways.

It’s important to note that although 50% of first marriages end in divorce, that number jumps to 67% of second marriages and 80% of third marriages end in divorce.

So if you’re remarrying, you should think about starting out with a prenuptial agreement. This type of agreement is made between two people prior to marriage. It sets out rights to property and support, in case there’s a divorce or death. Both parties must reveal their finances. This is really helpful, when each may have different income sources, assets and expenses.

You should discuss whose name will be on the deed to your home, which is often the asset with the most value, as well as the beneficiary designations of your life insurance policies, 401(k)s and individual retirement accounts.

It is also important to review the agents under your health care directives and financial powers of attorney. Ask yourself if you truly want your stepchildren in any of these agent roles, which may include “pulling the plug” or ending life support.

Talk to an experienced estate planning attorney about these important documents that you’ll need, when you say “I do” for the second (or third) time.

Reference: Pittsburgh Post-Gazette (February 24, 2019) “You’re in love again, but consider the legal and financial issues before it’s too late”