Celebrity Estate Planning Mistakes

Celebrity Estate Planning Mistakes

As we are now in the second month of the New Year, how many of your resolutions have you kept?  Well, it’s not too late to keep that resolution to plan your estate or update your existing estate plan.

Stop Procrastinating and Plan Now
Canadian Olympic skier Sarah Burke was only 29 when she died tragically from injuries sustained in a skiing accident last month.  It’s a dim reality that accidents and serious medical conditions can affect any of us, at any time.  But being prepared can make an awful situation easier on you and your loved ones.

Almost everyone procrastinates preparing a will, trust, or other estate planning document.  Author Stieg Larsson of The Girl With The Dragon Tattoo book series died unexpectedly of a heart attack at age 50, and passed away without a will.  This resulted in a battle between his girlfriend of 32 years and his family.  The family inherited his $40 million estate and still ended up in a lawsuit with the girlfriend for possession of his laptop which contained an unpublished fourth manuscript.  Had Larsson taken steps to plan his estate, the bitter battle and costly lawsuit would have been avoided.

Don’t make the same mistake with your estate. You’ve worked hard your entire life and you should decide who receives your assets.  No one wants their loved ones to fight over their assets, or let state laws determine who receives their estate.

Appoint Medical and Financial Decision-Makers
R&B legend Etta James was 72 when she passed away in January after suffering from leukemia, dementia and other medical conditions.  Her final year was marred by controversy between her husband of 42 years and her two adult sons from prior relationships.  Her 2008 Power of Attorney gave legal authority to one of her sons, but her husband claimed it was signed after James already had dementia and was therefore incompetent.  As she was fighting for her life in her final days, her loved ones were battling in court over who would make decisions for her, including how much should be spent to pay for her care.

Britney Spears is under conservatorship.  Just recently, her father announced he was going to ask the court to terminate the medical/non-financial part of her conservatorship so she can get married without restriction. However, it is reported he will hang onto the financial control.  The reasons for this are suspect, and may be for the purpose of insulating Spears from lawsuits.

Whether you are 30, like Britney Spears, or in your 70′s, like Etta James, it’s critical for you to have a durable power of attorney and advance health care directive in place, in case you should suffer a serious medical condition or accident. Without these documents in place, your family members would have no right to make medical or financial decisions unless they go to court and seek guardianship and/or conservatorship.
As the Etta James case illustrates, this can be a breeding ground for family conflict. Even when there isn’t family fighting, such as in Britney Spears’ case, these court proceedings are still intrusive, public, expensive and very cumbersome.

It’s far better for you to keep yourself and your family out of court by having the proper medical and financial decision-makers appointed in these legal documents. That way you and your family will be protected in case something should happen to you that renders you unable to make your own decisions.

Don’t Forget About Updating Wills, Trusts and Other Legal Documents
Think you can stop reading because you already have your will, trust and power of attorney documents in place?  Think again. When was the last time you updated these documents? Have life events occurred like divorce, the birth of new children, starting a new business, or moving between states?  If so, or if you haven’t had these documents reviewed in the last three to five years, you still have work to do.

Heidi Klum and Seal should take notice. When couples — especially those with children like Seal and Klum — file for divorce, it’s important they visit their attorney or financial planner and start the process of updating legal documents as soon as possible. Would you want your ex-spouse to make medical decisions for you or be your life insurance beneficiary? That often happens when documents are not updated.

Author Michael Crichton’s estate highlights this point. He died at the age of 66, when his wife was six months pregnant. He never updated his will to include the new child, and in fact, his will had language excluding any new children.  His adult daughter from a previous marriage and his current wife fought in court over whether the baby should be allowed to inherit. Ultimately, the Judge ruled in favor of the wife, and the baby was allowed a share of the inheritance.  But it never would have gone this far if Michael Crichton had updated his will when his wife became pregnant.

Get Your Affairs Organized
Organizing your estate planning affairs is a critical step in the estate planning process which many people overlook. What good are properly-drafted wills, trusts, and power-of-attorney documents if no one can find them? You must know where these documents are at all times and should inform family members where these documents are stored. You should use an estate planning organizer to list out your legal and financial documents and assets, so family members know where to go if tragedy should unexpectedly strike.

Look at the recent Italian cruise ship disaster. There were reports of passengers stuck onboard, calling loved ones to make sure the kids where going to be taken care of and telling people where to find their wills and other legal documents. But, where the will is located is just the start. What about life insurance policies, bank accounts, real estate deeds, and other important information stored in your head that no one else but you know about?

No one should wait for a personal tragedy to strike; prepare ahead of time! Once you organize your legal and financial affairs and let trusted friends or loved ones know where the important legal and financial information is located, you can rest easier and not worry about protecting your family if something should happen to you.

Don’t let these celebrities’ ill-fated stories become your story.  Don’t procrastinate.  Appoint medical and financial decision-makers.  Update existing estate planning documents.  And make sure a trusted family member or friend knows where to find your estate planning documents at all times.  Proper estate planning can go a long way to making your life and your loved one’s lives much easier.

For more information on planning your estate or updating your existing estate plan, go to our website at www.RudolphLegal.com.

2016-11-05T19:46:22+00:00 February 2nd, 2012|Blog, Estate Administration, Estate Planning|