The best way to illustrate the importance of good estate planning is to share stories of what goes wrong when people fail to address this important topic. Celebrities give us no shortage of estate planning “counter examples.” I have several posters in my office entitled, “Estate Planning Mistakes of the Rich and Famous,” published by Insurance News Net Magazine.
There are so many examples that there are now five such posters with different examples of poor celebrity estate planning. In a previous column, I shared some of the stories from the original poster. Below are a few more in this never-ending supply of cautionary celebrity estate planning stories as provided by Insurance News Net Magazine.
Elizabeth Edwards attempted to disinherit her husband, former Presidential candidate John Edwards. However, North Carolina law does not allow the disinheritance of a spouse. It became a question of whether or not he could contest the estate plan and if so, whether or not the attorneys who drafted the estate plan would be liable to her intended beneficiaries for malpractice.
At the end of the famous Hollywood actor’s life, he was battling both cancer and his fifth wife. In the midst of his divorce proceeding, he attempted to change the beneficiary to his $1 million life insurance policy but was denied due to technical glitches. He died before he could address the issues with his beneficiary form. A court battled ensued. This illustrates the need to update estate planning and beneficiary designations as soon as life changes occur.
The former child actor divorced his wife two years before his death. After he unexpectedly died, his ex-wife claimed that she was entitled to his estate because of a handwritten will that was executed before his divorce. Other wills surfaced and there was debate about which will controlled.
After Marlon Brando died, his housekeeper claimed that he had promised to give her a house that he bought in the San Fernando Valley. However, it was an oral promise which is not sufficient estate planning. If this were truly his intent, he should have made it legally effective by formally amending his written estate plan.
Upon his death, Redd Foxx had virtually no assets yet owed the IRS $3.6 million in taxes. Furthermore, his executor was not able to track his royalties and other income, further complicating the settlement of his estate.
KRASA LAW is located at 704-D Forest Avenue, Pacific Grove, California and Kyle may be reached at 831-920-0205831-920-0205.
Disclaimer: This article is for general information only. Reading this article does not establish an attorney/client relationship. Before acting on any of the information presented in this article, you should consult a competent attorney who is licensed to practice law in your community.