Being rich and famous doesn’t always mean that you’ve got a good estate plan, and there’s no guarantee that there won’t be estate litigation contests. Here are just some examples of things that can go wrong.
Sometimes it doesn’t even get to the estate plan. In the case of famous DJ and radio personality Casey Kasem, his second wife and his daughter (from his first marriage) disagreed over having him cremated and where to bury him. Despite a court order, the wife had the body moved to Montreal and eventually had him buried in Oslo, Norway. In New York, he could have appointed someone before his death who could legally step in as his agent in charge of the disposition of his last remains.
And even when there are millions of dollars in the estate, that’s often not the issue. Take Robin Williams for example. He carefully set up trusts for his children and heirs. So instead, they fought over his personal items. His children fought with his wife (not their mother) in court over things including his memorabilia and watches.
Diana, Princess of Wales, left a detailed Will leaving most of her fortune in trust for Princes William and Henry. She also attached a “letter of wishes” dividing her belongings among her sons and her 17 god children. While England may allow this letter by reference in the Will, New York does not. Your wishes are not legally binding if they’re not in the Will.
Then there’s Dr. Martin Luther King, Jr. Despite his messages of peace and unity, the peace among his three children didn’t last very long. They are at odds over selling or keeping his Nobel Prize medal and annotated Bible as well as the licensing of his intellectual property. Most notably, they disagree (yes, in a court battle) about how to license Dr. King’s famous “I Have a Dream” speech.
Sometimes, the millions of dollars in the estate is the issue – especially if it’s left to the family pet. In the case of Leona Helmsley, there were four grandchildren and a dog. She disinherited two of the grandchildren and made the other two jump through hoops to get any of the money that had been put in trusts for them. The dog, Trouble, got $12 million in trust (a New York judge reduced the amount to $3 million).
Speaking of leaving odd things, William Shakespeare left his “second best bed” to his wife. Nothing else! Although in New York it’s perfectly legal to write such a Will, the surviving spouse always has what’s called a Right of Election. He or she can elect whatever is in the Will or one-third of the decedent’s estate. So no, try as you like, you really cannot disinherit your spouse.
But what about disinheriting children? Generally, children have no right to inherit from their parents. Take the case of Vickie Lynn Marshall (a.k.a “Anna Nicole Smith”). She claimed in her Will that she had one child, Daniel. But Daniel predeceased Anna Nicole. In reality, Anna Nicole also had a daughter, Danni Lynn, who did survive her mom. If Anna Nicole’s Will had said who should get her estate if Daniel predeceases, that person has the right to claim it. In this case, the court found that Anna Nicole was probably too busy to get around to amending her Will to include her daughter and Danni Lynn isn’t getting anything.
In Anna Nicole’s case, probably the only people who made out were the attorneys. In the case of Tom Carvel, it was definitely the attorneys who made out. His Will was poorly drafted and open to multiple interpretations – so many that it took 18 years to probate it. Ultimately, $30 million of Tom’s $70 million estate went to his attorneys.
James Gandolfini (a.k.a. “Tony Soprano”) got much closer to creating a well thought out estate plan. He created trusts for his two children and had almost all of the assets of his $70 million in various living trusts. The problem is that his kids get the assets when they turn 21. Most estate planning attorneys agree that 21 is too young to give that much control over that large an estate. And in Gandolfini’s case, the biggest winner turned out to be the IRS. They took almost $30 million in federal estate taxes.
After all these problem cases, I thought I’d end on a positive note. Jacqueline Kennedy Onassis died with an estate estimated at $200 million. Through careful planning and the use of various trusts, she minimized the estate tax consequences. The bulk of her estate passed to Charitable Lead Trusts (CLT). This is where the charity gets a small percent of the trust each year for a certain number of years. After that, the remainder of the CLT passes to her grandchildren. She was able to pass all except about 11% of her estate instead of losing 58% of it to various estate taxes and fees.