Major Estate Planning Mistakes by Celebrities
Because of some very obvious and egregious mistakes made by famous celebrities with respect to Estate Planning, all of us can learn and benefit and make sure that we eliminate these mistakes in our own planning.
Actor James Gandolfini, best known for his role as Tony Soprano on the hit TV series, died at the age of 51 in 2013, The Gandolfini Estate Plan was based on a Will rather than a Trust. Accordingly, his private affairs became public because of the Probate process. His failure to remove any of his assets from his Estate will result in a 40% estate tax netting about $20 Million of Gandolfini’s assets to the government. His daughter’s share will all be available to her at the tender age of just 21.
The actor Philip Seymour Hoffman died in 2014 leaving only a Will and most of his money to his live-in girlfriend and the mother of his three children. Because he and his girlfriend were not married, an unbelievable amount of taxes became payable. We can learn from Mr. Hoffman that marriage does really matter and that Wills need to be updated and timely revised. Moreover, normally, the Trust is a much better vehicle for Asset Protection and testamentary distribution than merely a Will.
James Dean died at age 29 without a Will. His entire Estate went to his father who had abandoned him as a child.
Marilyn Monroe died at age 36. Her Will left everything to her acting coach Lee Strasburg. Strasburg later married and upon death, his Estate plus all Marilyn’s Licensing and Royalty fees went to his widow, a complete stranger to Marilyn and not to charity as she intended.
Barbara Hutton was the granddaughter of the Woolworth Founder. At age 10 she inherited $25 Million in Trust. The Trust was worth $50 Million when it ended when Barbara turned 21 in 1933. Forty-six years and seven husbands later, she died at the age of 66 with a mere $3,000 in assets.
John Denver died in a plane crash in 1997 with no Estate Plan. His $19 Million Probate Estate and an IRS disputes took over six years. Because he failed to name a Pension beneficiary, tens of millions in taxes and tax compounding for the life of his children resulted.
Frank Sinatra, Jr. recently died at the age of 72 from cardiac arrest. He chose to do things “like his father in his own way” and created a real problem and mess by not consulting with an attorney and structuring an Estate Planning.
Florida Marlin’s pitching ace Jose Fernandez died at the age of 24 in a boating accident. He was unmarried, but his girlfriend was pregnant. The case has been challenged on all sides. Fernandez may well have wanted his girlfriend and child to be supported by his Estate, but that was not made clear in any legal documents.
The famous author Tom Clancy, was worth $80 Million when he died in 2013. His Estate which has been in litigation for years following his death had several problems because of the ambiguity and uncertainty of the Estate Planning documents that he did have. His second wife and his two sets of children are heavily involved in the litigation. The movie star, Robin Williams’ Estate ended up with a similar problem when the heirs argued over some of his belongings.
Obviously, to avoid as many mistakes as possible, even though we may not be rock stars or celebrities, like the ones I have mentioned, everyone who has children and/or assets must consult with a knowledgeable estate planning attorney and set up a reasonable and effective Estate Plan.