Four Estate Planning Blunders Made by the Rich and Famous

The rich and famous may have access to the best advice, but this is no guarantee against bad estate planning and a poorly-written will.  They can make the same mistakes as anyone and, because of their wealth, the cost of these mistakes is higher.

 

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Four Estate Planning Blunders Made by the Rich and Famous

Four Estate Planning Blunders Made by the Rich and Famous

The rich and famous may have access to the best advice, but this is no guarantee against bad estate planning and a poorly-written will.  They can make the same mistakes as anyone and, because of their wealth, the cost of these mistakes is higher.

Here’s our Hall of Fame estate planning flubs by the rich and famous.

Writing Your Own Will is Foolish … even for Supreme Court Justices

Chief Justice Warren Burger wrote his own will, but because it contained numerous misspellings and oversights, it cost his heirs hundreds of thousands of dollars. Chief Justice Burger’s will was valid, but many self-written wills are not, which carries the risk that the state’s intestacy laws will distribute assets.

Keep Your Will Updated

Actor Phillip Seymour Hoffman failed to update his will to account for two new daughters, endangering their ability to share in his estate. It also made the mistake of leaving his entire estate to his partner, Mimi O’Donnell, giving her the option of turning down the inheritance and placing it into a trust that would benefit Mr. Hoffman’s son. Bonus lesson: Don’t let a real estate attorney draw up your will!

Don’t Forget to Account for Taxes

Even with a well-written will, the death of Joe Robbie (owner of NFL’s Miami Dolphins) led to a food fight among his 11 children, but it was the tax bill that erased Mr. Robbie’s biggest legacy. Faced with an unplanned-for tax bill of $45 million, the estate had to sell the Miami Dolphins to raise the cash, resulting in the Robbie family losing its membership in the NFL family.

Pablo and Prince: No Will, Big Problems

While some rich and famous have poorly-written wills, or aren’t fully updated, others don’t even bother to execute a will. Pablo Picasso left an estate valued at $30 million in 1971 ($173 million in current dollars). Prince passed away in 2016 with an estate estimated to be worth $300 million. Legal battles over Picasso’s estate lasted for years, while Price’s estate may take just as long to settle.

Financial advisors can do their clients an enormous service by using their annual client reviews to ask if they have a will and whether it’s been updated to reflect changing family circumstances and marital status.

See referenced disclosure (2) at http://blog.americanportfolios.com/disclosures/ 

About The Author

Kimberly A. Branch, CFP®

 

Vice President of Marketing Strategy 
631.439.4600, ext. 217 

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