Stephanie Fierro 2013-02-01 02:44:25
Go Ahead – Make My Estate Plan If you’ve ever picked up a copy of People, US Weekly or any other grocery-aisle magazine then you’ve seen proof that celebrities are people too. People who, regardless of their status, must engage in certain mundane tasks just like everyone else. These magazines often feature photographic evidence of celebrities walking their dogs, grocery shopping and even taking out the trash. And, just like everyone else (perhaps more so) they are advised to create and maintain an estate plan. And, just like everyone else, sometimes they do and they don’t. But unlike everyone else, their estate planning follies make headline news. Consequently, their stories serve as cautionary tales and allow us to provide clients real-world, rather than hypothetical, examples of the issues that can result from inadequate, incomplete or outdated estate plans. These tales give weight to common concerns and help answer many frequently asked questions. Wills – Huh – What Are They Good For? It Depends. If your client is comfortable with the statutory defaults then, I suppose, a will is superfluous. That, however, is rarely the case. Nevertheless, Bob Marley, Jimi Hendrix, Sonny Bono, Howard Hughes, Stieg Larsson, Pablo Picasso and Abraham Lincoln all died intestate (without a will). So, for example, 27 year old Jimi Hendrix’s estate was distributed by law entirely to his father. His brother, with whom he was reportedly very close, received nothing. No Woman, No Estate Dispute. Marriage is a major life event and often cause for celebration – unless it is a young model and an aging billionaire whom the model met while stripping. Such marriages are less often celebrated and more often scrutinized. We will never know why then 26 year old Anna Nicole Smith married 89 year old J. Howard Marshall II. But her attempts to inherit upwards of $450 million dollars from his estate resulted one of the most protracted and publicized legal battles of all time. Despite the fact that Marshall’s estate plan made no provision for her, or his eldest son for that matter, and despite having reportedly received $8 million dollars in gifts during their 13-month marriage, she claimed that he verbally promised her one-half of his estate. The epic estate battle continued for more than fifteen years. The court ultimately ruled against her - several years after her own death from a drug overdose. Divorce is also a major life event and it is an important, if not imperative, time to reevaluate estate plan documents. Take Gary Coleman for example. The child actor who starred in the eighties sitcom “Different Strokes” was married in 2007 and divorced by 2008. But in 2010 when he fell down the stairs (and subsequently died) his ex-wife was still his designated agent under his healthcare power of attorney. She also later fought to claim his estate and made a few bucks selling deathbed pictures of the former child star. The Wind Cries Baby When a new child is born to or adopted by a family, that baby should be included in the parent’s estate plan. While most plans provide for after-born and after-adopted children sometimes such children are specifically excluded. For a male celebrity it may actually be sound legal advice to advise the exclusion of such children to avoid a torrent of paternity claims. Maybe that is why Heath Ledger’s will specifically excluded any child not named therein. Since his will was created several years prior to the birth of his daughter we can assume he did not intend to exclude her, but that’s why it is so important to update existing documents. Enter again Anna Nicole Smith. Despite being engaged in estate litigation for the better part of her adult life, her own estate plan failed to provide for her after-born daughter. Instead, her preexisting will left everything to her son who predeceased her by several months. F.Y.T. – Fund Your Trust As I’ve mentioned in prior articles, creating a trust can be important. Trusts can be very useful estate plan tools. Funding such trusts is also important. Nevertheless, it is not uncommon for trusts to go unfunded for a variety of reasons. Michael Jackson, left a monumental task for his heirs and executors by not properly funding the trust he’d created. As a result many millions of dollars of assets needed to go through expensive probate. The Secret Life of Your Estate Plan Someone needs to know where to find the original estate plan documents. Although Florence “FloJo” Griffith Joyner created a plan, she never told her executors (or anyone for that matter), where the original documents were. The originals were never found which frustrated the administration of her estate and delayed its resolution by several years. He Did It His Way Studies suggest that more than 50% of adults in the United States do not have a will. If that’s true then the celebrities above are not such an anomaly. Despite the numbers, there are several examples of celebrities who established a successful estate plan. Frank Sinatra included a no-contest clause, so the administration of his estate was marked by the absence of disputes. Whitney Houston and Ray Charles used trusts to provide for their children. Brittany Murphy’s estate plan was updated after she married to intentionally exclude her husband. And Steve Jobs used trusts to help ensure the privacy of his affairs and minimize the potential tax impact. State law will often provide statutory defaults to address the issues mentioned above - issues which only become apparent after the decedent’s death. Although it may not be the ideal solution or create the intended result, it can, for example, provide for after-born children. Ultimately, it is best to plan properly and plan often. Stephanie Fierro is an associate attorney with The Frutkin Law Firm, PLC. Her practice focuses on estate planning and general counsel business law. Stephanie enjoys helping clients plan for the future. For more information please call 602.606.9300 or visit www.frutkinlaw.com.
Published by Target Market Media . View All Articles.
This page can be found at http://digitaleditions.walsworthprintgroup.com/article/ESTATE+PLANNING/1302005/144944/article.html.