If you want your children, grandchildren, siblings or favorite charities to inherit your wealth with minimal hassle, it’s critical to have a solid estate plan in place. Nevertheless, it's surprising how many American adults haven't done so.
Even celebrities aren’t immune from failing to create a will or protecting their legacy from taxes and expensive legal battles. Here are some notable examples of estate planning mistakes and the consequences that resulted.
The Queen of Soul died in 2018, leaving fans with a legacy of wonderful recordings and performances. Unfortunately, however, Ms. Franklin died without a will or estate plan in place. Her four sons filed documents in the Oakland County (Michigan) Probate Court listing themselves as interested parties, while Ms. Franklin's niece asked the court to appoint her as personal representative of the estate.
Her estate will be distributed according to the laws of her state of residence (Michigan). In addition, creditors will have a chance to make claims against her estate and may get paid before any of her heirs. The settling of her estate could drag on for years at a potentially high financial cost.
The enigmatic star of The Dark Knight and Brokeback Mountain did have an estate plan in place when he died in 2008 at the age of 28. But when he had a daughter with actress Michelle Williams, he never updated his will to include either of them as heirs. As a result, his entire estate was left to his parents and sister.
Prince Rogers Nelson, who gained fame as the artist known as Prince, died in 2016 at age 57 without a will. The first of hundreds of claims on his estate was made by a woman claiming to be his sister. Hundreds of court filings from prospective heirs, creditors and other “interested parties” soon followed. The entire ongoing proceeding is open and available to anyone for scrutiny.
Phillip Seymour Hoffman
The Oscar-winning actor did leave an estate plan when he died at age 46 in 2014, but it didn’t adequately shield his estate from taxes. As a result, federal and state taxes reduced the value of his estate by nearly 40%.
The legendary electric guitarist was only 27 when died in 1970. Because Jimi didn’t have a will, intestate laws awarded his entire $66 million estate and future royalties to his father, Al. In his own will, Al left control of Jimi’s estate to Jimi’s stepsister, while leaving almost nothing to Jimi’s brother. This started a series of lawsuits and countersuits that dragged on for more than 30 years.
The eccentric billionaire, who never left a will, made headlines for several years following his death in 1976. Countless bogus wills appeared out of nowhere. Numerous fortune-seekers claiming to be his wives and relatives came forward. Three states — Nevada, California, and Texas — claimed responsibility for the distribution of his estate. Finally, in 1983, his estimated $2.5 billion estate was split among some 22 "relatives" and the Howard Hughes Medical Institute.
Despite his many premonitions of an early death and the constant threat of assassination, the 16th President of the United States never created a will. After Lincoln was murdered by John Wilkes Booth, his son Robert asked Supreme Court Justice David Davis to serve as the administrator for Lincoln’s estate, which was worth $85,000 at the time (the equivalent of several million dollars today).
Don’t let the legacy you’ve worked so hard to create get mired in probate and swallowed up in unnecessary legal costs. Work with a qualified estate planning attorney to create a plan to protect and distribute your wealth with minimal delays and disruptions.
Chris Gullotti is a financial advisor located at Canby Financial Advisors, 161 Worcester Road, Framingham, MA 01701. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 508.598.1082 or [email protected]
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances.