Thirteen Celebrity Estate Planning Lessons Revisited
Episode 339- The rich and famous are prone to estate planning mistakes. Today we look at some real world examples, and the lessons we can all learn from all of them.
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Transcript of Podcast Episode 339
Hello this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, we will take a look back at one of our favorite previous episodes, thirteen celebrity estate planning lessons.
In a recent article for the website Wealthmanagement.com, author David Lenok took a look at one of our favorite subjects: celebrity estate planning gone wrong. He came up with a list of thirteen celebrities and the mistakes they made in their planning, all of which ended up costing their families dearly later on. Let’s take a look at some of the lessons learned.
1. James Gandolfini
When the star of the popular television series, The Sopranos, died suddenly in 2013, he made one basic mistake: not taking full advantage of the marital exemption. The result was that his estate ended up paying taxes that could have been avoided.
For example, he decided to leave part of his estate directly to his children. An alternative would have been to leave the assets to his wife in trust for his children, thus taking full advantage of the marital exemption, while still insuring that the assets would eventually get into the children’s hands.
2. James Brown
The singer commonly referred to as the "Godfather of Soul," apparently knew what he wanted to happen when he died in 2006, but the instructions he left behind caused great confusion to his heirs. It ended up taking over fifteen years to straighten things out between all the parties involved, and in the end, it cost millions in both legal fees and taxes. The lesson: be sure to make your intentions clear.
3. Michael Jackson
This one is simple. The very popular entertainer, dubbed the "King of Pop," tried to do the right thing. He created a trust. But he never got around to funding it. Predictably, this led to years of public bickering among family members, and millions of dollars lost.
4. Howard Hughes
The billionaire business mogul died way back in 1976. His intentions were never clear because he never documented what he wanted properly, and a Nevada court eventually ruled that Hughes had died intestate. His estate was eventually split among 22 people and the Howard Hughes Medical Institute. Hughes may have intended to split his estate a certain way, but we’ll never know. It’s doubtful he would have been happy with what happened.
5. Michael Crichton
The Jurassic Park author died in 2008 at a time when his wife was pregnant. His unborn son’s needs were never addressed in his estate planning documents. His wife eventually sued to include their son, who was born shortly after Crichton’s death. This set off a public court battle with his daughter from a previous marriage.
