Whenever a celebrity dies, there is great public interest in how the estate will be distributed. The details can be fascinating, especially when the celebrity fails to properly address his or her estate planning. For example, reports indicate that Prince did not have an estate plan because he did not trust attorneys. Not only will the settlement of his estate unnecessarily incur extremely expensive attorney fees and executor fees, but there is controversy regarding the proper heirs of his estate.
Celebrities make estate planning mistakes so often that there seem to be unlimited stories warning about the consequences of failing to properly address estate planning. In fact, I have several posters in my office describing the many blunders of the rich and famous and the lessons to be drawn from these examples.
Part of the reason why we are able to understand the details of these estate planning mistakes is because poor estate planning often leads to court procedures such as probate which is a public process. Indeed, the details of the decedent’s assets, the values of each asset, the beneficiaries, and the names and addresses of each beneficiary become public record. However, there are times when celebrities seem to do their estate planning correctly. In those instances, the details of their affairs are private, despite the desperate attempt of the media to create a story. One example appears to be that of legendary college basketball coach Pat Summit.
Pat Summit died earlier this year at the age of 64 after a battle with Alzheimer’s disease. Recently, a newspaper obtained a copy of her will after it was filed with the court and wrote an article implying that the will revealed substantive details about the distribution of her estate. The article included comments that the will “did not spread [her] assets around” and that it left her “tangible personal property” to her only son. Upon further examination, Summit’s will is a “pour-over will,” a type of will that is used in conjunction with a revocable living trust.
Most comprehensive and properly drafted estate plans center upon a revocable living trust. It is the trust that provides the details of the distribution of the majority of the estate. The trust remains private after the trust-maker’s death and the media is shut out of the details. One requirement of a revocable living trust is to re-title the vast majority of the decedent’s assets to the trust. In the event that the decedent forgot to title some assets to the trust, the estate plan will also include a “pour-over will” which simply names the trust as the beneficiary of any assets that were accidentally left out of the trust prior to the decedent’s death. The details of the trust, including the assets that were titled to it before the decedent’s death and the distribution of those assets, remain private.
Sometimes the “pour-over will” distributes the tangible personal property, such as jewelry, clothing, furniture, and other household items. Summit’s will included such a clause. However, beyond the tangible personal property, the will did not reveal any details of how Summit’s estate is to be distributed. For greater privacy, the estate plan could be structured in a way where the tangible personal property is assigned to the trust during the decedent’s lifetime and the distribution of those assets is private as well.
The comment in the newspaper article that her will “did not spread [her] assets around” is misleading due to the fact that it is unknown how her trust was structured. It is quite possible that she left all her real property, cash, and investments to her son but it is also possible that she made gifts to other family members, friends, and charities. The public will likely never know because of the privacy that a trust-based plan affords.
Privacy is just one of the many benefits of a properly drafted estate plan that centers upon a revocable living trust.
KRASA LAW, Inc. is located at 704-D Forest Avenue, Pacific Grove, California 93950 and Kyle may be reached at 831-920-0205.
Disclaimer: This article is for general information only. Reading this article does not establish an attorney/client relationship. Before acting upon any of the information presented in this article, you should consult a competent attorney who is licensed to practice law in your community.