Estate Planning Mistakes of Celebrities (Part 1)
Over the next couple of weeks, you will receive a series of articles entitled “Lessons Learned from Estate Planning Mistakes of Celebrities,” demonstrating why probate is such a nightmare and lessons that can be learned from the costly mistakes of celebrities.
Part 1 will explain how Amy Winehouse didn’t have an Estate Plan, leaving behind a $6.7 million estate.
Part 2 will describe how Whitney Houston didn’t have a Living Trust and her Will was filed publicly in probate court.
Part 3 will explain how Michael Crichton didn’t update his estate plans, leaving his wife and baby empty-handed.
Part 4 will describe how Etta James didn’t have a Durable General Power of Attorney, causing a father/son feud in court.
Part 1: Amy Winehouse Didn’t Have an Estate Plan, Leaving Behind a $6.7 Million Estate
Did you know that 66 percent of adults don’t have an Estate Plan? Whether you are wealthy or have a modest estate, proper estate planning is critical.
When she unexpectedly passed away at age 27 with a $6.7 million estate, singer Amy Winehouse didn’t have any kind of Estate Plan in place. Winehouse may have wanted to pass money on to her brother, her ex-husband, or a charity of her choosing, but no one will ever know. Since she died without having any kind of Estate Planning, her entire estate was passed on to her parents under the laws of London, England.
Legally, if you die without a Will or Living Trust here in the U.S., the state determines who will be your ultimate heirs. This distribution plan can be found in the intestacy statute of each state. This law varies from state to state, but typically if you die intestate, the estate will go to spouse and children, or parents or siblings if you are single and don’t have kids. The applicable state law can be either the location of your legal residence (for personal property), or the state in which your assets are located (for real estate). Find out more about Wills and other related topics.
Here at The Law Firm of Evan H. Farr, P.C., we advise that our clients should almost always use a Living Trust as their primary Estate Planning tool, in order to protect assets at death from having to go through probate. A Will allows you to direct who receives your assets (i.e., who are your beneficiaries) and who manages your estate (i.e., who acts as your executor), but a Will does NOT protect your assets from going through probate. Only a properly funded Living Trust protects your assets from going through the “nightmare of probate.”
Why is probate such a nightmare?
1) Probate requires frustrating intrusion by the court, lawyers, and the public at a very emotional and private time. A court may have to decide who is a legitimate creditor, and may have to rule on distributions to children and other beneficiaries. Your executor may have to engage attorneys to shepherd the executor through the legal maze.
2) All of your legal and financial affairs will become public knowledge. The contents of your Will becomes a public record on file at the courthouse, for everyone to view. Wills can be read by salesmen, reporters, and anyone who is curious – especially identity thieves and con artists who are trying to take advantage of someone who is grieving and going through the nightmarish probate process.
In Part 2 of this series, we’ll examine another “celebrity mistake” and examine more reasons why probate is such a nightmare. Learn more about the benefits of using a Living Trust for Estate Planning.
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