Yes, Virginia, even celebrities can make huge estate planning mistakes.
America is a celebrity culture.
Some people want to be famous.
Others simply have a favorite celebrity.
Many people attempt to emulate these public figures.
According to a recent Florida Today articles titled “Lessons in estate planning from the rich and famous,” following the example of the rich and famous is not always wise.
This is especially true with estate planning.
Mistakes can take several forms.
Celebrity Phillip Seymour Hoffman had two distinct issues with his plan.
What were they?
Hoffman chose an estate planning attorney who was ignorant of estate and tax laws in New York.
The other issue was the “age” of his estate plan.
Hoffman had not updated his plan in 10 years.
A lot can change in a decade.
Although his estate plan had been valued around $35 million, these mistakes caused his estate to lose between one-half to one-third of its value in estate taxes.
The long time partner and children of this celebrity inherited far less than they could have.
Another example of poor planning by celebrities is Ric Ocasek who died this past autumn.
The lead singer of The Cars was separated from his wife Pauline Porizkova when he died.
He changed his will to disinherit her even if the divorce was not finalized before his death.
The language was sufficient for New York law; however, it was insufficient for Florida law.
His celebrity status made no difference.
Florida protects the mandatory minimum inheritance of a surviving spouse, regardless what the estate plan provides.
Although this elective share is unavoidable in Florida, an experienced estate planning attorney could give the decedent greater control of this election through the use of an elective share trust.
Although creating a estate plan is better than having none at all, it is important to thoroughly research your attorney.
These celebrity estates reveal how important it is to choose an experienced and knowledgeable estate planning attorney who is licensed in the state where you reside.
Reference: Florida Today (Dec. 27, 2019) “Lessons in estate planning from the rich and famous”