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Lessons from celebrity estate plans

California residents might be able to learn something about estate planning by observing what has happened in that regard to certain celebrities. Although the average person will leave behind fewer assets than a movie star, there are still many valuable lessons that can be learned from the way that celebrities planned or failed to plan their estates.

An example of a person who failed to finish planning his estate is Sopranos' actor James Gandolfini. Although Gandolfini drew up a will soon after his youngest child was born, he did not create a trust. After he died at the age of 51, fees and taxes ate up around 55 percent of his estimated $75 million estate. When Heath Ledger died at the age of 28, he left behind an outdated estate plan that did not list his daughter as a beneficiary. As a consequence, Ledger's family became involved in an ugly legal battle over his $20 million estate.

Michael Jackson's estate plan was complete when he died, but the King of Pop failed to transfer any of his assets into a trust that he had set up. Because his trust had not been funded, Jackson's assets were divided in a public probate process. On the other hand, Joan Rivers' 'pour over" will left clear instructions for all of her assets to be transferred into her trust when she died. The trust document controlled how the assets were divided among Rivers' beneficiaries, and the process was kept private.

A person may be able to avoid making some of these mistakes by working with an attorney. Legal counsel with experience in estate planning can assist in preparing documents that take into account potential tax implications and that can be easily modified if necessary when circumstances change.

Source: North Bay Business Journal, "Celebrity estate plans, the good, bad and ugly", Emily Menjou, Jan. 26, 2015

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