It may be fun to read about celebrities and their latest exploits but, at the end of the day, death is the one great equalizer. Unfortunately, we've read time and again about famous names in the news who've passed on, only to leave a complex mess of assets and debts for those they've left behind.
Here are several estate planning mistakes that some well-known celebrities have made. Hopefully, you can learn from their well-publicized mistakes and have an estate plan that will protect you and your family.
Mistake #1: No will
The number of celebrities who have died without having a will could fill up this page. Among them are Prince, Jimi Hendrix, Pablo Picasso, Sonny Bono, and even Abraham Lincoln. Not having a will can be a disaster for those left behind. It's unlikely that your estate will be divided the way that you'd want, and most end up in costly legal proceedings that deplete estate values.
Mistake #2: No current will
Do you have a will but it's just not current? If that's the case, you might be just like singer Barry White. White died with an outdated will and his soon-to-be ex-wife ended up with everything. His long-time live-in girlfriend, however, received nothing. Life circumstances change often, so it's important that you review estate planning documents every few years to make sure that your wishes are current.
Mistake #3: No tax planning
Joe Robbie didn't plan for estate taxes, and his family had to sell off a lot of assets, including a stadium and part-ownership of the Miami Dolphins, to pay the bill. You don't necessarily have to be a celebrity to be subject to the estate tax. If your estate could potentially reach the current threshold, you'll want to do some careful planning. Also, depending on where you live, some states have a separate estate tax threshold which is much lower.
Mistake #4: Not mentioning personal property
Do you have personal property that family might have disputes over? Actor Robin Williams' family is currently battling (in court) over his film memorabilia. Martin Luther King, Jr.'s children had staunch disagreements over both his Nobel medal and his Bible. If there is personal property that might cause conflict, list these separately, provide photos with the list, and then state your wishes regarding disposition.
Estate planning usually isn't at the top of one's list of things to do, yet this isn't something that should be put off. Stress, grief, and added expense for your loved ones can be avoided if you take care of these matters sooner rather than later. In nearly all cases, you'll want to meet with a qualified estate planning lawyer to help you draw up these important documents.