With all the wealth accumulated by the rich and famous, one would assume that celebrities would take steps to protect their estates once they pass on. But think again: Some of the world’s richest and most famous people have passed away without a will or a trust, while others have made mistakes that tied their fortunes and heirs up for years in court. Let’s take a look at three high-profile celebrity probate disasters and discover what lessons we can learn from them.

 

  1. Tom Carvel

 

As the man who invented soft-serve ice cream and established the first franchise business in America, Tom Carvel had a net worth of up to $200 million when he passed away in 1990. He did have a will and accompanying trust that provided for his widow, family members and donations for several charities, but he also named seven executors, all of whom had a financial stake in the game. The executors began a round of infighting that lasted for years and cost millions. In the end, Carvel’s widow passed away before the disputes could be settled, essentially seeing none of the money.

 

Lesson learned: “Too many cooks spoil the broth.” Your trustee and executor may have to make tough decisions. Consider naming executors and trustees who have no financial interest in your estate to reduce the risk of favoritism. Also, consider have only a single trustee and executor rather than a committee.

 

  1. Jimi Hendrix

 

Passing away tragically at age 27, rock guitarist Jimi Hendrix left no will when he died. What he did leave behind was a long line of relatives, music industry bigwigs, and business associates who had an interest in what would become of his estate – both what he left behind, and what his intellectual property would continue to earn. An attorney managed the estate for the first two decades after Jimi’s death, after which Jimi’s father Al Hendrix successfully sued for control of the estate. But when Al attempted to leave the entire estate to his adopted daughter upon his passing, Jimi’s brother, Leon Hendrix, sued, launching a messy probate battle that left no clear winners.

 

Lesson learned: When you don’t leave a will or trust, the effects can last for generations. An experienced estate planning attorney can help put your wishes in writing so they are carried out after your death rather than opening a door to costly conflict.

 

  1. Prince

 

The court battle currently in preparation over Prince’s estate is a celebrity probate disaster in action. When the 80’s pop icon died in early 2016, he left no will, reportedly due to some previous legal battles that left him with a distrust of legal professionals in general. The lines are already being drawn for what will likely be a costly and lengthy court battle among Prince’s heirs. Sadly, there’s even a battle looming about determining, for certain, who his heirs actually are.

 

Lesson learned: Correct legal documentation protects your legacy. Don’t let a general distrust or a bad experience cause your heirs to fight and potentially lose their inheritance.

 

These celebrity probate disasters serve as stark reminders that no one’s wealth is exempt from the legal trouble that can occur without proper estate planning. As always, we are here to help you protect your family and legacy. Give us a call today.

As we build wealth, we naturally desire to pass that financial stability to our offspring. With the grandkids, especially, we often share a special bond that makes us want to provide well for their future. However, that bond can actually turn into a weakness if proper precautions aren’t set in place. If you’re planning to include the grandchildren in your will, here are five potential dangers to watch for, and ways you can avoid them.

 

  1. Including no age stipulation.

 

We have no idea how old the grandchildren will be when we pass on. If they are under 18, or if they are financially immature when you die, they could receive a large inheritance before they know how to handle it, and it could be easily wasted.

 

Avoiding this pitfall: Create a long-term trust for your grandchildren that provides continued management of assets regardless of their age when you pass away.

 

  1. Too much, too soon.

 

Even if your grandkids are legally old enough to receive an inheritance when you pass on, if they haven’t learned enough about handling large sums of money properly, the inheritance could still be quickly squandered.

 

Avoiding this pitfall: Outright or lump-sum distributions are usually not advisable. Luckily, there are many options available, from staggered distributions to leaving their inheritance in a lifetime, “beneficiary-controlled” trust. An experienced estate planning attorney can help you decide the best way to leave your assets.

 

  1. Not communicating how you’d like them to use the inheritance.

 

You might trust your grandchildren implicitly to handle their inheritance, but if you have specific intentions for what you want that inheritance to do for them (e.g., put them through college, buy them a house, help them start a business, or something else entirely), you can’t expect it to happen if you don’t communicate it to them in your will or trust.

 

Avoiding this pitfall: Stipulate specific things or activities that the money should be used for in your estate plan. Clarify your intentions and wishes.

 

  1. Being ambiguous in your language.

 

Money can make people act in unusual ways. If there is any ambiguity in your will or trust as to how much you’re leaving each grandchild, and in what capacity, the door could be opened for greedy relatives to contest your plan.

 

Avoiding this pitfall: Be crystal clear in every detail concerning your grandchildren’s inheritance. An experienced estate planning attorney can help you clarify any ambiguous points in your will or trust.

 

  1. Touching your retirement.

 

Many misguided grandparents make the mistake of forfeiting some or all of their retirement money to the kids or grandkids, especially when a family member is going through some sort of financial crisis. Trying to get the money back when you need might be difficult to impossible.

 

Avoiding this pitfall: Resist the temptation to jeopardize your future by trying to “fix it” for your grandchildren. If you want to help them now, consider giving them part of their inheritance in advance, or setting up a trust for them. But, always make sure any lifetime giving you make doesn’t leave you high and dry.

 

If you’re planning to put your grandchildren in your will or trust, we’re here to help with every detail you need to consider. Contact us to explore your options and protect your family.

 

When establishing a trust, you need to give serious thought to choosing your successor trustee—the person who will administer your trust once you’re no longer able to do so. This individual ideally should be:

 

  • Someone you trust implicitly.
  • Someone who is organized, responsible and meticulous.
  • Someone who can remain steadfast to your wishes in the face of family disagreements and other disputes regarding the trust.

 

That said, even the most capable, well-intentioned successor trustees can make mistakes when managing affairs. Here are five surprisingly common mistakes along with steps to take to prevent them from happening.

 

  1. Faulty Record-keeping

 

To ensure that a trust fulfills its purpose without being contested, the trustee must keep accurate, detailed records of income and distributions. Your trustee must also be prepared to report these figures regularly to the beneficiaries and heirs. If these records are incomplete or inaccurate, the door is opened for someone to challenge the trust, potentially leading to lengthy and costly court battles.

 

To prevent this mistake: Hire an accountant to assist the successor trustee in record-keeping, and make sure the trustee and the accountant make a connection before the trustee takes over.

 

  1. Misunderstanding the Fiduciary Role

 

Many trustees mistakenly assume their job involves acting in the best interests of the person setting up the trust. In reality, their job is to act in the interests of the beneficiaries of the trust. Furthermore, the trustee may be legally liable for any failure to protect the beneficiaries against bad investment advice concerning the trust.

 

To prevent this mistake: Detail the fiduciary role of the successor trustee in the trust documentation itself, and be certain that the trustee understands his/her role.

 

  1. Not Collaborating Effectively with Your Established Financial Team

 

The successor trustee’s failure to communicate with key members of your team while administering your trust can lead to inaccuracies, misunderstandings and significant, preventable financial losses.

 

To prevent this mistake: Make sure your trustee is properly introduced to, and connected with, your attorney, CPA, financial planner and anyone else involved with your estate planning.

 

  1. Failing to Discuss Compensation

 

If your appointed trustee is a close friend or family member, the topic of compensating the trustee may be glossed over or forgotten. This oversight can result in a lack of morale or even resentment if managing the trust becomes difficult or time consuming.

 

To prevent this mistake: Bring up the topic of compensation yourself when you establish the arrangement; be as generous as you deem necessary; and put the compensation terms in writing.

 

  1. Failing to Remain Objective

 

Many people choose a close family member as a trustee. This strategy can be appropriate, especially when privacy matters. However, disputes about money can happen even in the tightest-knit families, and it can be difficult to near-impossible for a relative to remain neutral when resolving those fights. The end result could be decisions that family members perceive to be unfair or that wind up being inconsistent with your intentions.

 

To prevent this mistake: Make certain the person you choose can remain neutral and faithful to the terms of the trust, even under duress. If there is any doubt, consider hiring a corporate trustee with no emotional connection to the family or estate.

 

Selecting a successor trustee is one of the most important decisions you will make during your estate planning process. For insightful counsel on this issue, contact us today to schedule a private appointment.