Over the years, there have been many stories of celebrities passing away and leaving their loved ones to solve complicated problems due to lack of proper estate planning. Money, success, and fame do not protect celebrities, nor you and I, from the problems created by incomplete, improper, and outdated estate planning. Below are lessons that can be learned from mistakes made by celebrities in the estate planning arena.
Have A Plan—Creating An Estate Plan Is Essential (Prince)
According to an IRS tax settlement, at the time of his death in 2016, Prince had a net worth of $156.4 million. Prince passed away without a will, trust, or any estate planning documents. This lack of planning led to a six (6) year probate process and disputes between his heirs and the IRS. In the end, his estate was divided between his half-siblings under Minnesota law—which many say would not have been his wish. As a result of the failure to plan Prince’s estate dragged on for years, paid more in tax then was likely necessary, and the beneficiaries of the estate were determined by state law rather than individual wishes. Prince’s story illustrate the necessity of ensuring you have an estate plan in place.
Update Your Plan—As Major Life Events Occur Your Plan Should Be Modified (Kobe Bryant & Heath Ledger)
Kobe Bryant tragically passed away in a helicopter crash seven (7) months after the birth of his youngest daughter, Capri. Kobe had a trust based estate plan and had updated it after the birth of his three other children, however Capri was not added to the trust prior to Kobe’s untimely death. As the trust was written, if Kobe’s wife, Vanessa, were to pass away, the family’s wealth would be distributed to Kobe’s older children, to the exclusion of Capri. While the omission of Capri was an oversight, it necessitated a Petition to add Capri to the trust, which was ultimately successful under California law. Kobe’s story illustrates that it is never too early or too soon to ensure your estate plan is up to date as your life changes.
Heath Ledger also passed away in an untimely manner. Heath created his will in 2003 prior to the birth of his daughter in 2008. The 2003 will left his estate to his parents and siblings and did not account for his daughter or her mother. Ultimately, Heath’s family gifted the proceeds of the estate to his daughter. Had this not taken place, a long and expensive fight would almost certainly have occurred. Heath Ledger’s story is another example of the importance of ensuring your estate plan is up to date and is modified as your life evolves.
Fund Your Trust—Estate Planning Does Not End At Signing (Michael Jackson)
At the time of his passing, Michael Jackson had a revocable living trust in place. However, the trust had never been funded. As a result, the probate process was required to move the assets from his individual name into his trust—adding significant delay in distribution and unnecessary expenses. While there are the rare occasions when a trust intentionally remains unfunded, generally speaking an unfunded revocable living trust defeats the purpose of having the trust. After you have gone through the trouble of setting up your estate plan, make sure the process is seen through to completion ensuring the plan functions as you intend it to.
Plan For Incapacity—Designate The Agents Of Your Choosing (Brian Wilson & Casey Kasem)
Brian Wilson, a member of the Beach Boys, was declared incapacitated by the Los Angeles Superior Court in 2024. This determination was made following the passing of his wife and primary care giver. Wilson’s publicist and business manager were appointed as his conservators, even though he had then living children. With a general durable power of attorney and health care power of attorney and advanced directive, conservatorship could have been avoided, and Brian could have chosen his own agents to see to his affairs.
Casey Kasem, the host of America’s Top 40, was married twice during his life. The first marriage led to three children and the second resulted in an additional child. Kasem was diagnosed with dementia leading to lawsuits, including claims of elder abuse, between his children from his first marriage and his second wife. While the matter was settled out of Court, the entire dispute could have been avoided with a proper power of attorney.
Don’t Do It Yourself—Consult An Estate Planning Professional (Chief Justice Warren Burger)
Former Chief Justice of the U.S. Supreme Court, Warren Burger, prepared his own 176 word will. His will contained typos and failed to give his executors all of the powers required to properly administer his estate, including the inability to sell real estate. Commentators have expressed opinions that the DIY will led his estate to pay excess taxes, some suggesting as high as six figures. This could have been easily avoided, had Justice Burger consulted an estate planning professional and not undertaken to prepare his will himself.
Closing Thought
While very few people enjoy taking the time and expending the resources required to create a proper estate plan, the celebrity estate planning blunders discussed above highlight the need to take estate planning seriously. Everyone, despite level of wealth, should have an estate plan prepared by a professional and updated on an ongoing basis. Taking the time to ensure your estate plan is prepared properly allows you to make sure your wishes are fully and accurately captured as well as to take care of your family and avoid delay, expense, and litigation following your passing.
