Estate planning can be a painstaking process especially if you’re a celebrity who has amassed wealth and properties over the years. Not only will you have to deal with your mortality by discussing with your lawyer on how you want your estate to be divided among your loved ones, relatives, friends, and others, but you’ll also have to worry about covering all the bases to avoid complications for your family after you have left them to the other side. More importantly, you will need to hire someone who knows what they are doing to ensure that you create a proper estate planning.
Unfortunately, it is all too easy to mess up an estate plan, as these families of deceased celebrities found out. Below are some of those who enjoyed life as a celebrity figure, but are now making the lives of their relatives miserable due to a messy estate plan.
The Emmy-award winning actor known for his role as Tony Soprano in HBO’s The Sopranos appeared to have done the legwork of planning for his estate prior to his untimely death after suffering a fatal heart attack. Gandolfini was unable to do tax planning that would have helped his family avoid paying for the estate tax. According to the New York Daily News, more than 80% of his estate are subject to the federal estate tax (40% tax for assets over $5.25 million) and the State of New York (between 5-16% for every million dollars accumulated in his his estate total costs). The estimated $30 million from both tax bills needs to be settled nine months after Gandolfini’s death.
Lesson: This probably is a classic case of incompetence – whether it’s from his financial and legal advisers who failed to see this glaring mistake in his estate planning, or Gandolfini failing to act upon the advice of his legal team.
The famous comedian/actor created a trust for his three children in order to ensure their privacy. However, since one of the co-trustees he listed on the document also passed away, the trust was made public, allowing people to see how much property has been transferred to the beneficiaries, among other sensitive information.
Lesson: Had Williams modified the document to ensure that the Living Trusts indicated are alive and well, getting the trust into the public’s hands could have been avoided.
Philip Seymour Hoffman
The Oscar-winning actor ensured that his children won’t grow up to be entitled kids through a trust fund. Therefore, Hoffman foolishly gave all of his estate to his longtime girlfriend and mother of his children. As a result, the estate plan is undergoing a public probate, which closes on all the possibility of reducing or avoiding estate taxes.
Lesson: While his intention is noble, what Hoffman should have done instead is provide a trust fund to his children indicating when and how they will receive the money. By creating an estate plan to a legal family member (since his girlfriend isn’t), he allows his family to get relief from the staggering estate taxes. Better yet, he could have married his girlfriend, among other easy fixes, to have furthered his estate plan into a mess.
Crichton has made a living writing fiction novels that were turned into Hollywood blockbuster hits such as Jurassic Park, The Lost World, and others. However, he won’t be able to write himself out of the mess he made with his estate plan.
Lesson: His inability to update his plan prevented his children with his current wife to receive anything from his estate. As a result, Crichton’s wife underwent a legal battle against the children from his former marriage regarding the inheritances all will receive.