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Written by Thomas Upchurch
Battles over wills and estates can happen in any family (and are usually kept private among family members), but for those in the limelight, will contests play out in public for all to see. The details of celebrity inheritance disputes captivate us because they so often involve other famous names and very large amounts of money.
While famous disputed will cases are interesting, some can also hold lessons in proper estate planning for everyone. Let’s take a look at some of the more famous celebrity wills and estates and what we can learn.
At his death in 2009, Jackson had three minor children. He also left behind a fortune built over a lifetime of as one of the world’s most famous and successful performing artists. His Last Will and Testament, signed in 2002, was only a few pages long, which may seem odd considering how vast and potentially complicated his estate must have been. But there’s a good reason for the brief will—Jackson had a trust-based rather than will-based estate plan, meaning that the trust was “in charge” of managing the estate.
The Michael Jackson Family Trust agreement (21 pages long) that Jackson signed in 2002 was an amended version of his original trust agreement from 1995. It clearly stated Jackson’s wishes for how his estate should be distributed, as it should have, but that alone did not prevent the problems that would follow.
Although Jackson chose wisely when he named a music executive and an entertainment attorney has his estate executors—who better, perhaps, to understand the types of assets that comprised Jackson’s estates?—the executors grossly undervalued Jackson’s likeness and name at little more than $2,000. The IRS, unsurprisingly, took issue, and valued the brand at more than $400 million. The outcome, which remains to be seen, may result in a tax on the estate that could be several hundred million dollars.
The lesson: Assets, particularly unusual ones, should be properly valued for estate tax filing. An obviously over- or undervalued asset may draw the IRS’ attention and draw out what may otherwise be a straightforward estate settlement process.
In 1970, the legendary guitarist died at the age of 27 in a London hotel. With no will, Hendrix’s estate became the center of a family dispute and other legal battles that are still being fought more than 30 years later.
At first, the estate was managed by an attorney in California. Twenty years later, Hendrix’s father sued to gain the rights to his music and won. Several partnerships, companies and trusts were established by his father, which helped the estate grow to a value of $80 million. When Hendrix’s father died in 2002, he left the bulk of the estate to his daughter, who he adopted with his second wife (not Jimi Hendrix’s mother). Hendrix’s biological brother then sued to be written into the will, and additional potential beneficiaries came forward to contest the will. At least one settlement was reached out of court between Hendrix’s brother and his father’s adopted daughter for damages related to the sale of merchandise using Jimi Hendrix’s name.
The moral of the fight over the Jimi Hendrix estate, of course, is to make sure you plan your estate. Even if you don’t have millions of dollars, a properly prepared estate plan can ensure that your wishes are recorded and that your assets end up in the hands of those you’ve designated as beneficiaries. An experienced estate planning attorney can help.
Whitney Houston passed away at the age of 48 in 2012, leaving behind one child, 19-year-old Bobbi Kristina Brown, who was named Houston’s sole beneficiary in a will prepared in 1993. On its surface, such a straightforward designation wouldn’t appear to be cause for later disputes, but the estate remained unsettled for years following the death of Brown, who left no will.
The terms of Houston’s will required her estate to be paid to Brown in installments and, if Brown died without having married or had children by the age of 30, the estate would go to Houston’s living relatives. Bobby Brown, Houston’s ex-husband and Bobbi Kristina Brown’s father, was also listed, but he and Houston divorced in 2007, which nullified his claims to her estate. With Bobbi Kristina having no will, however, Bobby Brown can still make some claim to her estate.
There is an important takeaway here: Estate documents such as wills and trusts should be updated regularly, and especially when there has been a change such as a divorce, marriage, birth of a child, or other significant life events.
This case also highlights another point: Regardless of age (or assets), everyone should have a will! If you are considering creating an estate plan, we can help—contact us online or call us at 386-320-6169 to schedule a consultation.
The acclaimed Oscar-winning actor had a will that had been prepared 10 years before his death in 2014. The will included provisions for a trust for a child he had when the will was signed, with his estate going to his longtime companion (and mother of that child), Marianne O’Donnell. At the time of his death, Hoffman and O’Donnell had two more children, who are thought to have been provided for by New York law that states children born after a will is executed will share in the estate.
Because they were not married, however, O’Donnell is expected to have to pay estate taxes, which could total an estimated $11 million or even higher, depending upon the actual value of his estate.
What to remember: Trusts and other estate planning strategies can protect a portion of an inheritance from taxes. In addition, if Hoffman had established trusts for each of his children, they would have been protected from the possibility of someday being disinherited if O’Donnell marries again and leaves the estate to her new husband.
On your own, it’s difficult to consider the wide range of possibilities that may have an effect on your estate. Working with an experienced estate planning and probate lawyer can help you plan effectively for your future and that of your beneficiaries. Make sure to keep your will and other estate documents up to date as circumstances change.
Another example of how insufficient estate planning can result in a significant tax burden for beneficiaries is the actor James Gandolfini’s estate. Instead of taking advantage of several ways to minimize taxes, he left nearly 80 percent of assets subject to federal and state taxes.
Estate planning and tax experts say that simply making gifts to his family members that were placed in trust (and to be held until his death) could have avoided estate taxes on those gifts.
The clear lesson here is to be sure to explore all of the legal avenues that are available to everyone for minimizing estate taxes, such as trusts. Because there are several types of trusts—and certain duties that trustees are responsible for—it’s wise to have an experienced trust administration attorney explain all of your options and help guide you to the strategies that are best for you and your beneficiaries.
We may not be all that surprised that actors, musicians or other performers were discovered to have had improper or poorly prepared estate plans, but it’s especially interesting when titans of business or industry, or those with famous family fortunes, make missteps with their estates. These are just two examples:
The cosmetic heiress: L’Oreal heiress Liliane Bettencourt was the richest woman in France, with an estate estimated to be worth tens of billions of dollars. After her 2007 death, a “multi-layered legal” battle ensued with a public feud that held the world’s attention for years with fights between her daughter and a celebrity photographer taking center stage. Even France’s president Nicolas Sarkozy was drawn in by accusations he and other political figures had taken advantage of Bettencourt when she was in her nineties. Details of the case highlight the importance of being on guard against exploitation of the elderly and having a qualified probate attorney help you protect your loved ones’ interests.
The hotel magnate: Anyone who lived through the early 2000s knows the name of Leona Helmsley, who died in 2007. Although she was a New York real estate tycoon with a fortune worth billions, she unfortunately is often remembered for having left $12 of her estate to her dog rather than her grandchildren. In 2009, however, the court ruled that the dog would receive only $2 million and that the grandchildren would receive $6 million (the remainder went to charity).
The eccentric millionaire: It took more than three decades, but Howard Hughes’s will was finally settled in 2010. The film producer/aviator/engineer died without a will, so according to state law, 11 cousins were to share in his estate. Several people came forward over the years to lay claim to the estate, including a man who alleges he was given a handwritten will by Hughes after having picked up the millionaire on a Nevada highway and a woman who said that Hughes had married her in international waters in 1949. In the end, the handwritten will was deemed a forgery and the woman received an undisclosed amount to drop her lawsuit.
Most people don’t need to be concerned about how future royalties from their multimillion-dollar estates will be someday be managed, but everyone should have a complete estate plan. Our expert estate-planning team can help protect your interests now and those of your beneficiaries in the future with complete estate and probate legal services. Contact us to schedule your evaluation today.