Estate Planning Horror Stories!!!
Horror stories are a dime-a-dozen during this time of year, full of ghosts, goblins and ghouls. But the real horror stories happen all year long and involve creditors taking your retirement benefits, do-it-yourself wills resulting in forfeiture of federal estate tax exemptions, or court battles over the distribution of personal property.
Luckily, you're being proactive and taking the steps necessary to prevent your own estate from suffering a similar fate. Right?
In case you need some inspiration to start planning your estate, I present the following estate planning horror stories. These stories are taken from the lives (and deaths) of celebrities who we love to read about and often try to emulate. Let these stories be a lesson to you and your family so that you can avoid your own estate planning horror story.
Robin Williams' Family Dispute
Robin Williams, the beloved comedic actor who starred in Mork & Mindy, Jumanji, Good Will Hunting, and so many more movies & television shows, took his own life in 2014 after battling severe depression and Parkinson's disease. He was survived by a third wife, Susan Schneider Williams, and three adult children, Zachary, Zelda, and Cody.
Williams' estate plan consisted of a trust naming his adult children as beneficiaries, which also established a second trust used to support his most recent wife. Williams also accounted for the distribution of most of his personal possessions: his children were to receive his awards & career memorabilia, possessions from his home in Napa, and clothing, jewelry, and photos owned prior to his most recent marriage in 2011, while his wife was to receive their home in Marin County as well as the possession in the residence. It should be noted that the couple had a prenuptial agreement.
Despite Williams' attempt to divvy up his property, a court battle arose between his wife and children. The wife argued in court that she was not receiving enough money to cover the insurance, mortgage and upkeep of the multimillion dollar property she inherited from Williams. The children responded that the wife was seeking an income stream from the estate.
In addition, the wife claimed certain property should not be classified as memorabilia (which the children received) but instead were Williams' personal collection of knick-knacks, and that his watch collection should not classified as jewelry (which also went to the children). The children argued that the wife was trying to change the terms of the trust by challenging the plans Williams made for his estate.
This legal dispute recently settled out of court, with the wife receiving a portion of the estate estimated at more than $100 million. If Mr. Williams had made his wishes more clearly known as part of his estate plan, this costly legal battle may have been avoided.
The Williams Lessons: 1. Your estate plan should be detailed enough to minimize potential arguments over your assets; and 2. you should make your family members aware of your estate planning wishes!
Mickey Rooney and Elder Abuse
Mickey Rooney, whose iconic Hollywood career lasted over eight decades, passed away in his sleep in 2014. During his lifetime, he had nine children from eight different marriages, 19 grandchildren, and several great-grandchildren. He was survived by a wife, Jan Chamberlin Rooney, although they separated from each other during 2012.
Rooney even testified on Capitol Hill before the Senate Special Committee on Aging, where he explained his experience as a victim of elder abuse. He stated he "felt trapped, scared, used and frustrated." He also encouraged other victims to come forward, stating, "Because of your love for other family members, you might feel hesitant to come forward, but I want to tell you this: You are not alone and you have nothing to be ashamed of. If elder abuse happened to me, it can happen to anyone. I want you to know you deserve better."
So what does Rooney's tale have to do with estate planning?
Several of his family members argued over his estate in probate court. Instead of arguing over money, however, they argued about where his body should be buried. Christopher Aber and his mother (Rooney's wife Jan) demanded in court that Rooney's body be buried in a family plot where Jan could be buried next to him. One of Rooney's other step-sons (who was also one of Jan's sons) and the Rooney estate executor opposed the request. The family reached a settlement, allowing Rooney to be buried in the Hollywood Forever Cemetery. Rooney had expressed his wish in recent years to be buried near other Hollywood stars but it does not appear these wishes were memorialized in his estate planning documents.
The Rooney Lessons: 1) Be certain you can fully trust the people you choose to handle your finances and affairs, both in life and death; 2) don't be afraid to change who you have named as an executor/guardian/fiduciary/etc.; and 3) estate planning should be used to make all your final wishes known, including the location of your final resting place!
The Paul Walker Estate
Paul Walker, best known for his role in The Fast and the Furious movie franchise, suffered a tragic death when he was killed in 2013 as a passenger in a high speed car crash. He was survived by his parents and his 15-year-old daughter, Meadow Rain Walker.
Walker's Last Will & Testament was signed in August of 2001, when he was only 28 years old. This was also the year the first Fast & Furious movie was released and likely well before Walker earned the $25 million that were part of his estate at death.
Although we will never know for sure, it is likely that Walker's wishes changed over the course of twelve years and $25 million in assets. For example, Walker named his mother as the guardian over his daughter. Several circumstances can change in life such as an individual's health, wealth, and ability to care for another. It is possible that Walker's mother was well suited to care for Meadow in 2001 but no longer able in 2013.
In addition to the changes in personal circumstances, state and federal tax laws tend to change over the course of years. For example, Ohio's estate tax ended in 2013, which means that an estate plan drafted prior to that year may be in need of updating to benefit from current law.
The Walker Lessons: 1. You are never too young to create an estate plan; and 2. your estate planning documents should be updated regularly!
How to Avoid Your Own Estate Planning Horror Story
The stories presented above are just a sampling of the problems that can occur when someone passes away without a well-drafted estate plan. At a minimum, your estate plan should consist of a last will and testament, a living will, a durable general power of attorney, and a health care power of attorney. If you want ever more control over your estate, you should consider creating a revocable living trust.
If you already have some or all of these documents, it is important that you regularly review and update your estate plan when necessary. If you have had a major life change such as a marriage or divorce, or there has been a birth or death in your family, your estate plan should be reviewed. It is also possible that changes in the law have made your estate plan outdated or inefficient.
For a limited time, I am offering a free consultation to discuss your estate plan. This includes a free review of existing estate planning documents that you may have. Contact me today at (330) 603-6198 or JPB@JPBarnhartLaw.com in order to set up your consultation.