LAMORINDA WEEKLY | Avoid These Celebrity Mistakes With Your Estate Plan
Published December 28th, 2016
Avoid These Celebrity Mistakes With Your Estate Plan
By Matthew Talbot
Everyone makes estate planning mistakes, but when
celebrities make them we're sure to hear about it. While
the net worth of celebrities like Prince may be hundreds
of millions more than the average Lamorinda family,
each story has a morsel of wisdom for us all.
In case you've missed the biggest estate planning
debacle of the year, I'll start with a brief summary of
famed musician Prince, and then update you on a few
celebrity stories you may not be so familiar with.
Lesson: Have an estate plan
Matthew Talbot is a Moraga resident and an elder
law and estate law attorney, with offices in
Walnut Creek and from his home. Contact him or
his wife, Elizabeth, at 925-322-1763. Their office
is located at 2033 N. Main St., Ste 750, Walnut
Creek, CA 94596.
Prince made the worst, most obvious, and also most
common estate planning mistake of all - he failed to do
an estate plan at all. By doing so, he left considerably
more money to his heirs (five siblings) than he may have
wanted and inadvertently gave millions to attorneys,
private banks and the U.S. government. In addition, his
wealth could have potentially benefitted a number of
charities and other worthwhile causes, but instead will go
to the government, lawyers and heirs who may not be
capable of managing such a large influx of cash.
Lesson: Update your Estate Plan to account for
beneficiaries' level of maturity, personality, and general
situation in life.
Unlike Prince, Whitney Houston took the prudent step of
drawing up her estate plan. Unfortunately, she never updated it after her daughter was born. Just prior to
the birth of her daughter Bobbi Kristina Brown in 1993, Whitney drew up a Will and Trust. Over the next 18
years, her wealth grew to a fortune of over $20 million. According to reports, her estate planning documents
allowed for Bobbi Kristina to have 10 percent of the fortune at age 21, and the rest paid out later. This
meant that at age 18, Bobbi Kristina was given a payout of approximately $2 million. By not updating her
estate plan, Whitney failed to account for whether or not her daughter would be capable of handling such a
large amount of money. Bobbi Kristina unfortunately died shortly after turning 21. Her boyfriend at the time
was recently found legally responsible in a wrongful death suit.
Lesson: Create a trust and be sure to re-title your assets in the name of the trust. Ask your attorney for
help if necessary
Michael Jackson acted prudently by creating an estate plan. Unfortunately, he failed to place a substantial
amount of his assets in the trust. This is called failure to "fund" a trust. When someone creates an estate
plan, the largest part of the plan is typically the creation of one or more trusts. Trust documents protect
assets, avoid probate, and spell out a distribution plan. However, in order for a trust to work as intended, it
must be funded. This means assets have to be retitled in the name of the trust. Because Jackson failed to
take this important step, his estate - and its beneficiaries - have been in and out of probate court numerous
times.
While the possibility of going to court can never be completely avoided, not funding one's trust increases the
likelihood of litigation, high attorneys' fees and time in court.
Lesson: Provide for the possibility of new heirs, such as children or grandchildren
Heath Ledger died tragically in early 2008. The young actor had indeed created a will, but he (or his
attorney) had failed to include the possibility that he might have children at the time of his death. Heath's
will left his entire estate - $20 million - to his parents and three sisters, and completely omitted his
daughter. Whether or not one has children at the time they create their estate plan, a good will or trust
should provide for the possibility of children born in the future. Many people make the mistake of thinking
they will update their will when/if any major life changes occur, but many don't get around to it. Luckily for
Ledger's daughter, relatives revealed that the majority of his assets would be put in a trust for his daughter.
Lesson: Keep your Estate Plan in a safe place, like a Safe Deposit Box
Like Heath Ledger, Olympic track and field gold medalist Florence Griffith Joyner had a will. Unfortunately,
file:///C/...s/Andy/Documents/Web/Lamorindaweekly/archive/issue1022/pdf/Avoid-These-Celebrity-Mistakes-With-Your-Estate-Plan.html[12/27/2016 12:39:19 PM]
LAMORINDA WEEKLY | Avoid These Celebrity Mistakes With Your Estate Plan
she never told anyone where it was located. A lack of original estate planning documents is perhaps the
main key to Pandora's Box of down and dirty family fighting. Joyner's estate was litigated for nearly four
years before the family was able to come to a settlement, and assets could be distributed. It's unknown how
much was spent on attorneys' fees, and how many relationships were ruined by the fight.
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Lamorinda Weekly, Moraga CA
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