Volumes could be written about estate planning mistakes of the rich and famous. In fact, many books have already been written on the subject (see Trial & Heirs by Danielle & Andy Mayoras for one). However, these stories are not only valuable as juicy tidbits of gossip. They can help people by giving them an opportunity to look at their own estate plan and avoid making the same mistakes.
Jimi Hendrix
You should always have a will. Music legend Jimi Hendrix died at the very young age of 27 in 1970 without a will. Under state law, his dad, Al, got everything, leaving his brother Leon with nothing. Jimi and Leon were very close. Although Al had built Hendrix’s musical legacy into an $80 million business enterprise, in his own will cut out Leon and his family, in favor of his adopted daughter through a later marriage. Leon, Jimi’s brother and friend received nothing. Jimi probably would not have been happy with Leon becoming Mr. Bad Luck.
Chief Justice Warren Burger
Even if you believe you know the law, hire a qualified attorney to create your estate plan. Chief Justice Warren Burger died in 1995 with a $1.8 million estate and a will of 176 words he typed up himself. Short and simple are good, and Chief Justice Burger clearly had a strong background in the legal field. Unfortunately, his family paid $450,000 in estate taxes, something that could have been easily avoided. And his executors had to pay to go to court to get approval to complete administrative acts, such as selling real estate that typically a well-drafted will would have allowed without court approval.
Princess Diana
Don’t rely on “letters of wishes” to convey your intent to executors. At her death in 1997, Princess Diana left a detailed will, naming her sister and mother as executors. She also wrote a separate “letter of wishes” asking her executors, at their discretion, to divide her belongings among her sons and her 17 godchildren. But instead of getting stuff worth an estimated 100,000 pounds, each godchild got only a trinket. Either the executors didn’t understand, or greed is found in all families, including that of Princess Di.
Heath Ledger
Keep your will up to date. When actor Heath Ledger died unexpectedly at age 28 in 2008, he had a will, but it was written three years before he died, prior to his relationship with Michelle Williams and the birth of their daughter, Matilda Rose. The will left everything to his parents and sister. When Ledger’s uncles raised fears that his father wouldn’t properly care for Matilda Rose, Ledger’s father said he would. Of course the stories have not stopped there, but that gossip is for a different time and place.
Doris Duke
Try to pick a responsible and trusted person as executor. Tobacco heiress Doris Duke, who died in 1993 with a fortune estimated at $1.3 billion, named her butler as executor and as trustee for a huge charitable foundation. After the butler’s lifestyle and spending habits were called into question, he was removed from his duties by a probate judge, and then later reinstated by New York’s highest court. A settlement agreement created a board of trustees to manage the foundation. This was, of course, not the only issue with the estate of Doris Duke. There was also a lawsuit filed by Hare Krishna devotee Chandi Heffner, who had previously been adopted by Duke so as to inherit the trust income Duke received and her children were to receive. A lawsuit was filed by Harry Demopoulos challenging the appointment of the butler of the estate, but only because Demopoulos believed he should have been appointed. Duke University filed suit claiming a larger share of the assets. The moral of that story is clearly that even The Richest Girl in The World can have her share of problems.
More to come in Part 2 of this series.