Of the many obscure “holidays” now nationally recognized, we think August’s national “Make a Will” month is a particularly important one (Yes, seriously, this is a thing!). For many busy Texans, this yearly reminder is just the motivation they need to finally sit down and create their estate plan. No matter what your estate includes, everyone needs a plan.
If you already have an estate plan – fantastic! You are better prepared for the inevitable than more than half of Americans. But while estate plans never expire, it is still important to review your plan often and update it as needed. Common scenarios for estate plan revisions include a death in the family, change in marriage status, birth of a child, major changes in financial situation, and moving to a different state.
In either case, working with an experienced estate planner is crucial to avoid costly mistakes, protect your loved ones, and ensure your estate passes according to your wishes.
So, in honor of “Make a Will” month, here are a few stories of famous families who failed to plan:
Leaving It to Chance with No Planning
Steve McNair was a Super Bowl quarterback and 3-time Pro-Bowler who was killed at the age of 36 by his mistress. McNair did no estate planning at all, leaving his $20 million dollar estate to be argued over in the Tennessee probate courts. The result? When his children turn 18, they will receive their inheritance outright. Can you imagine giving an 18-year-old child several million dollars?
“Do-It-Yourself” Planning
Heath Ledger created a simple, three-page document before he made his fortune from his Oscar-nominated performance in Brokeback Mountain. When he died at age 28, that simple will had never been updated and still provided that his estate should be divided equally among his parents and his siblings, failing to include anything for his daughter with Michelle Williams. Although his family ultimately provided for his daughter, Ledger left his family a legacy of lawsuits, confusion, and negative publicity.
Outgrown or Inadequate Estate Plans
Michael Crichton was the creator of movie hits like Jurassic Park and the television series ER. Understanding the importance of sound estate planning, Michael Crichton planned carefully, incorporating a premarital agreement with his fifth (and surviving) wife into his planning to make sure that he fully provided for his child from a previous marriage. However, Crichton and his wife were expecting a new baby when Crichton died unexpectedly. His will had not been updated to provide for his soon-to-be born son, resulting in a court battle between his daughter and his 5th wife (on behalf of her son) to determine what share his son was to receive. His son ultimately inherited from his father, but the cost of the litigation reduced the inheritance and the conflict likely damaged familial relationships.
Leaving It to Serendipity
Marilyn Monroe left three-fourths of her estate to her acting coach, Lee Strasberg on the “promise” that he would leave it to charities she wanted supported. But, when he died, his interest in Marilyn’s estate actually went to his third wife, Anna, who eventually hired a company to license Monroe’s products, including Mercedes-Benz and Coca-Cola. Later, in 1999, many of Monroe’s belongings were auctioned off, including the gown she wore to President John F. Kennedy’s birthday party, for more than $1 million. Strasberg ended up selling the remainder of the Monroe estate to another branding company for an estimated $20 million to $30 million, according to NPR. None of Marilyn’s estate benefitted the charities she had asked Strasberg to benefit.
Keeping Up with Your Family and Planning
Remember Las Vegas legend Sammy Davis Jr. who died in 1990? He was a member of the “Rat Pack,” along with Frank Sinatra and Dean Martin. Despite a long career in show business, Davis’ estate had dwindled by the time of his death, and he left behind a huge tax bill that the estate was unable to pay. The problem? Although his will left very generous gifts to a lot of people, at the end of the day the tax debt exceeded the assets he left and his estate was insolvent, resulting in the beneficiaries of his will getting nothing.
Other Notable Mentions
Elvis Presley – the King: estate shrinkage of 73%
Rock Hudson – movie star: estate shrinkage of 54%
J.P. (John Pierpont) Morgan – financier, investment banker and philanthropist: estate shrinkage of 69%
John D. Rockefeller, Sr. – oil baron, industrialist and philanthropist: estate shrinkage of 64%
Alwin C. Ernst – a CPA and founder of Ernst & Young: estate shrinkage of 56%
Howard Gould – son of Jay Gould, railroad baron: estate shrinkage of 78%
William Boeing – founder of Boeing, the aircraft manufacturer: estate shrinkage of 47%
*”Shrinkage” due to taxes, administrative costs, mismanagement and lawsuits.
Estate Planning Done Right
The success story of Jacqueline Kennedy Onassis highlights how a well-prepared estate plan can leave a lasting legacy and ensure that your heirs receive what you worked long and hard for. The First Lady had a comprehensive estate plan that she updated regularly so that at the time of her death, less than 3% of her estate, which exceeded over $200 million, was lost to estate taxes.
The moral of the story is, estate planning can be challenging, but should be done right and reviewed often to ensure your family is provided for. Take time this month to discuss your needs with a team of well-trained, attentive estate planning professionals at Thrash, Carroll & Vanway Law Group.