Forbes’s recent article entitled “Lessons to Be Learned From Failed Celebrity Estates” gives us some great examples of poor decisions by stars that left their families in a mess, estate planning-wise. You can learn from the Estate Planning mistakes of celebrities. Here are three:
James Gandolfini of Sopranos fame left only 20% of his estate to his wife. What a mistake, if he left more of his estate to his wife, the estate tax on that gift would have been avoided in his estate. He failed to maximize the tax savings.
As a result, more than half (55%) of his total estate, including a significant art collection, was liquidated and sent to the federal government to pay estate taxes.
Michael Crichton’s pregnant fifth wife survived the Jurassic Park author. His son was born after his death, but because his will failed to anticipate a child being born after his death, his daughter from a previous marriage tried to exclude that baby from his estate.
The California statute would have included his son in his estate as pretermitted heir. Still, Crichton included language that specifically overrode that statute and excluded all heirs not otherwise mentioned in his will a big mistake! He failed to update his will with the new child on the way— not anticipating that he would die with an unborn son, which he didn’t mention in the will.
Doris Duke, the heir to a tobacco fortune, left her $1.2 billion fortune, including extensive art and historic real estate holdings, to her foundation when she died in 1993. Duke’s butler was named to be in charge of the foundation.
The consequences: There were many lawsuits claiming mismanagement and costing millions in legal fees.
You can see that even the most famous and the wealthiest people have failed to plan for their demise properly and their mistakes have inflicted unnecessary pain, headaches, and expense on their families. In estate planning, if you do not learn from other’s mistakes, you are likely to repeat them.
Reference: Forbes (June 18, 2021) “Lessons to Be Learned from Failed Celebrity Estates”