Properly funded Living Trusts can guarantee that the details of your estate remain private after your death. On the other hand, details of estates that are submitted to Probate Court become part of the public record. That's why we know so much about the famous estates of Michael Jackson, Elvis Presley, Gary Coleman and other celebrities. Let’s look at a few of their strange, sad stories.
James Brown was known as the Godfather of Soul. When he passed away he left three ex-wives and a 'wife' who was actually still married to someone else. He meant to leave his $100 million estate to needy children. But five years after his death, not one child has received a cent due to a will contest (an objection raised against the validity of his will) by his family. He needed much better estate planning. His documents hadn’t been updated in years and his true intentions seem ambiguous.
Royalty isn’t exempt from the need for comprehensive estate planning. Princess Diana of Wales wrote a non-binding “letter of wishes” expressing her intention that 25% of her tangible possessions – possibly valued at over $2 million -- be passed on to her 17 godchildren, but the letter was ignored and what the godchildren actually inherited amounted to nothing more than trinkets wrapped in newspaper. Lady Di may as well have died intestate for all the good her estate administration did those kids.
Marilyn Monroe, meanwhile, left the majority of her estate to her acting coach Lee Strasberg with no strings attached. When Lee died his interest in Marilyn’s estate was passed to his third wife, a woman Marilyn had never even met. The woman made an estimated $20 to $30 million by selling Marilyn’s possessions and licensing her image to help companies like Coca Cola and Mercedes-Benz peddle their wares. Marilyn could have created a Living Trust to make sure that only Lee and any contingent beneficiaries he designated would have access to the wealth of her estate.
Even legal professionals make estate planning mistakes. The former Chief Justice of the United States Warren Burger drafted his own famous will – using only 172 words! Not only did his estate have to go to probate court, he failed to take advantage of an important deduction and overpaid his estate taxes, costing his heirs over $450,000.
What lessons can be learned from these celebrity estate planning follies? There are a number of very important takeaways:
Not every celebrity had poor estate planning, however. It seems that Steve Jobs was as shrewd in his personal affairs as he was in business.
There's little I can add to all that has been written about Steve Jobs since his untimely death at the age of 56. He's been called this generation's Thomas Edison. He founded Apple Computers and brought computing out of the climate controlled mainframe room to our desk tops. He left Apple and revolutionized the way animated films are made with Pixar studios. Then he returned to Apple and oversaw the creation of consumer devices such as the iPod, the iPad and the iPhone that changed just about everything.
Jobs was tied for 39th on Forbes's 2012 list of the 400 richest people in America. His fortune is estimated to be in excess of $7 Billion. When he sold Pixar Studios to Disney he received 138 million shares of Disney stock making him the largest single shareholder. It's estimated that he received $242 million in Disney dividends alone since 2006.
Who will receive his fortune now? We will probably never know. Reuters reported that Jobs transferred the titles to his California real estate to separate trusts in 2009 shortly after his first leave of absence from Apple. Those trusts were undoubtedly custom-tailored to hide Jobs’s estate from prying eyes, protect his legacy from taxation to the greatest extent possible, and make sure he provided for the loved ones and organizations he cared for the most. We’ll probably never hear more than stray rumors about what was left to whom.
Living Trusts are not just for the rich and famous. During the past 30 years I've helped thousands of Michigan families use proper estate planning to avoid the pitfalls that many unfortunate families have fallen into.
If you live in Michigan and need experienced estate planning help, contact Michael Einheuser for a free consultation. Michael helps families in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township, Bloomfield Township, and the surrounding Michigan areas.
Schedule your Free Consultation today: (248) 398-4665.