The escapades of the rich and famous can be entertaining to watch from a distance; however, we can also learn valuable lessons from celebrity mistakes. With that in mind, the Grand Forks estate planning attorneys at German Law | Wealth offer some celebrity estate planning lessons you should not ignore.
Lessons to Learn
The following celebrities left behind estates that were riddled with legal and financial problems because of the estate planning mistakes they made:
- Prince Rogers Nelson: Why You Need a Will. The famous singer known simply as “Prince” died at the relatively young age of 57 in April 2016. Along with being shocked at the “Purple Rain” singer’s death, people were also shocked that he had not executed even a basic Last Will and Testament prior to his death. A Minnesota judge was left to decide how to distribute Prince’s estimated $300 million estate. Prince left behind six half-siblings and a variety of other people claiming to be heirs to his estate. Ultimately, the cash in Prince’s estate was split evenly between Prince Legacy LLC and Prince OAT Holdings LLC. Prince Legacy LLC consists of interests previously held by three of Prince’s siblings while Prince Oat Holdings LLC is owned by music publishing company Primary Wave and consists of interests once held by his other three siblings, as well as three separate entities owned by Primary Wave. Prince may, or may not, have wanted his siblings to share his estate equally. Executing a Will would have ensured that his wishes were honored.
- Michael Jackson: Why It Is Important to Fund a Trust Immediately. Michael Jackson’s death in June 2009 touched off a string of ongoing court battles over his estate, now worth $600 million. Among Jackson’s biggest estate planning mistakes was creating a trust but failing to fund it. Absent a properly funded trust, Jackson’s beneficiaries have wound up numerous times in probate court, the estate is still open, and all things concerning it are subject to court approval. A simple Pour-Over Will, which “pours” over estate assets into a trust at the time of death, could have prevented this disaster.
- James Gandolfini: Why Tax Avoidance Strategies Are Important. The Sopranos actor James Gandolfini was reportedly worth $70 million when he died in June 2013 of a heart attack while on vacation in Rome. He executed a Will prior to leaving on his vacation that provided for his widow, daughter, and two sisters; however, Gandolfini didn’t incorporate tax avoidance strategies and tools into a comprehensive estate plan. Consequently, the estate ended up paying federal and state estate taxes at a hefty rate of 55 percent. Gandolfini could have taken a little extra time and included some tax avoidance strategies with his Will that would have saved his estate, and consequently his loved ones, a considerable amount of money that went to Uncle Sam instead.
- Whitney Houston: Why You Need to Update Your Estate Plan. Songstress Whitney Houston had a Will when she died in 2012, but it was executed a month before the 1993 birth of Houston’s only child, daughter Bobbi Kristina Brown. Houston never updated her Will. By the time of her death, her fortune had climbed to $20 million and her daughter, Bobbi Kristina, was 18 years old. Under the terms of the old Will, Bobbi was to receive 10 percent of the estate – $2 million — when she turned 21 and the remainder later. Unfortunately, failing to update her Will meant that Houston failed to consider whether her daughter was mature enough to handle millions of dollars at the young age of 20 years old. Sadly, Bobbi Kristina got the $2 million but never received the rest of her inheritance because she died in 2015, also from drowning and drug intoxication. Had Houston taken the time to update her estate plan, she could have created a trust to help protect and manage Bobbi’s inheritance.
Contact a Grand Forks Estate Planning Attorney
Please join us for an upcoming FREE seminar. If you have additional questions or concerns, contact a Grand Forks estate planning attorney at German Law | Wealth by calling 701-738-0060 to schedule an appointment.
Associate Attorney at German Law | Wealth
John Oelke is an Associate Attorney and joined the firm in March 2022. He concentrates his practice on Estate Planning. He graduated from the University of North Dakota with a Bachelor of Business Administration in Finance specializing in Investments in December 2017. John earned his J.D. from the Creighton University School of Law in Omaha Nebraska in 2021. He is admitted to practice in both Minnesota and North Dakota.
John grew up on a small livestock farm in west central Minnesota. He now lives in Grand Forks with his wife Maggie and their two daughters. In his free time John enjoys reading, taking his family to North Dakota and Minnesota state parks and rooting for all UND and Minnesota professional sports.
John grew up on a small livestock farm in west central Minnesota. He now lives in Grand Forks with his wife Maggie and their two daughters. In his free time John enjoys reading, taking his family to North Dakota and Minnesota state parks and rooting for all UND and Minnesota professional sports.
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