You would be forgiven for thinking wealthy individuals would be able to use the finest legal minds available to create their Will and ensure their estate is divided without any problems. Alas, even millionaires receive bad financial advice and make poor decisions. The trouble with being wealthy AND famous is that you have a lot of hangers-on looking to benefit from your generosity. Once the celebrity dies, people come out from under their collective rocks looking to get a slice of the pie.
Bad estate planning can happen with rich celebrities too; and when they die without leaving a clear Will, chaos ensues. One of New York’s best known estate planning attorneys, Yulia Vangorodska, says that the failure to maximise their lifetime giving is the single biggest mistake made by wealthy people. She said that a trusted financial advisor can create sophisticated financial planning strategies to ensure a person’s wealth is maximised.
Below, we look at five celebrities who were guilty of bad planning and one who did precisely what you are supposed to do along with a bonus example of terrible estate planning.
The actor, best known for Dirty Dancing and Ghost, left a Will that caused all sorts of problems. Some of his relatives believe he made his Will when in hospital around 60 days before he died. The Will left his entire estate to his wife while his mother and siblings got nothing. As no formal lawsuit was made to challenge it, the Will remains valid and there is not likely to be a court case since it is over 5 years since Swayze died. There may be a time limit on when you can challenge a Will so don’t delay.
The famous author’s estate planning was not very clear and as a result, his family is now fighting over $8 million. While the estate was worth $82 million, the argument is over who has to pay the IRS bill. This should be a lesson to ensure trusts are clearly written because ambiguous documents lead to arguments.
The actor tragically died aged 40 and his father filed paperwork to ensure his son’s Will was opened in probate court to reveal the star had left $25 million in assets. While Walker wrote his Will at a young age back in 2001, his failure to update the documents has led to some problems.
The child movie star is an example of how not to manage your money and is also a sad reminder of how the elderly can be abused. Rooney was 93 when he died and while he had no money, his family argued about where he should be buried instead. This shows how important it is to spell out your wishes and funeral details are especially important. If you don’t make things clear, your beneficiaries could end up spending a fortune contesting the Will in court.
Phillip Seymour Hoffman
Although he had a team of legal advisors to call upon, he ignored their advice when it came to creating a trust on the grounds he didn’t want his kids to be spoiled ‘trust fund babies’. He left everything to the mother of his kids in the hope she would manage the cash properly. However, his poor planning ensured a large tax bill awaited his beneficiary. It is possible to hire an attorney to come up with a clever way to provide incentives to beneficiaries in order to stop them being lazy or taking drugs etc. Seymour Hoffman really should have gone down this route.
Robin Williams – Showed Everyone How It Is Done
Public documents show that Williams left several trusts behind to benefit his heirs. These trusts, along with the fact that no probate estate was filed, suggest that the legendary funnyman did precisely what you are supposed to do when it comes to creating a Will to protect your family. While there were rumours he was short of cash when he died, his trusts actually had more than $20 million in equity. Since he did the correct thing when it came to using his trusts, the rest of his financial details are to remain private.
Once he died, it was announced that he suffered from Levy Body Dementia and Parkinson’s but as he drafted the Will years before he became sick, there can be no dispute.
Howard Hughes – As Mysterious In Death As He Was In Life
When Hughes died in 1976, his $2 billion estate was up for dispute since there was no Will. After a lengthy sequence of court battles, the money was shared between over 20 cousins! A Utah gas station owner by the name of Melvin Dummar claims Hughes left him $156 million during a late night visit.
In the end, it doesn’t matter how much money you have; if you don’t follow proper procedure when making a Will, you will cause havoc and heartbreak for those you leave behind just like the celebrities above did with the exception of Robin Williams.