Even with large fortunes at risk, celebrities are prone to making the same estate planning mistakes as those in the general public. A daunting process, estate planning can be made much less complicated with the help of a professional estate planner. The implications of failing to do proper planning include not having your wishes upheld, not protecting the financial future of your loved ones and costing the people that you care the most about. When former NFL player Steve McNair was killed by his girlfriend in 2009, his wife discovered that he had not prepared a will. Not only was his mother displaced from the home he bought her, his estate was slammed with a huge tax bill. It was not until 2012, that his widow petitioned the courts to have $3.7 million of the estate released to pay off the tax debt.
The absence of a will can tie up monetary funds for months, or years. It can prompt a legal battle between those that want to fight on behalf of what they think the deceased may have wanted, or what they feel they are entitled to receive. Leaving an outdated will and omitting important instructions from your will can cause similar conflict. Even though there are court processes in place to try to best administer a will when the estate planning is done poorly (or not done at all), going to court is the most expensive option. Estate planning is specifically designed to help avoid conflict during such a vulnerable time when you are dealing with a loss and emotions are raw. We can look to the following stories for examples of what not to do.
Here is a review of the top 10 celebrity estate planning mistakes:
Baseball legend Ted Williams indicated his choice of cremation in his will, but left a note 3 years later requesting biostasis after death with his younger children. The procedure costs $136k. Williams’ body was frozen after he died in 2002, but his oldest daughter from a previous marriage legally fought to have him cremated until she ran out of finances to continue. Sports Illustrated later reported that his body was mishandled after being stored at the cryonics company facility. His oldest daughter maintains that he wanted his ashes to be spread off the Florida coast.
Music legend Jimi Hendrix died at the young age of 27 and failed to leave a will. An attorney managed his estate for 20 years before his father, Al, sued and won rights to his music. Al managed the estate and grew it to $80 million. After Al’s death, the estate was left to his adopted daughter from another marriage. Jimi’s brother claimed his father was manipulated by his daughter into signing over the estate and took the matter to court. However, the judge ruled against him and he never received a penny. Allegedly, Jimi was the closest to his mother’s side of the family, which has never benefited from his legacy.
An out of court settlement was made with actor Marlon Brando’s “major domo” after his death in 2004. Angela Borlaza, Brando's chief assistant and homemaker during his last years maintained that Brando gave her the Orange County home that she lived in, a beachfront Tahitian bungalow and promised her that she would always have a job with his company. Borlaza was close to the family, helping to raise his son and becoming his legal guardian. She claimed that the June 2004 codicil to his will was forged, Brandon was too ill to have updated his will at that time and that she had been unjustly removed as a co-executor of the estate. Though her claims were not documented in writing, executors of the $21.6 million estate paid Borlaza a settlement of $125k.
Daughter Matilda Rose was not in the will when actor Heath Ledger passed away at age 28 in 2008. His will was drafted years before he started a relationship with her mother, actress Michelle Williams, and he had named his parents and sister as beneficiaries. Ledger reportedly only had $145k in assets at the time of his death. However, he had trust funds, Australian properties and U.S. real estate. Ledgers parents alleged that they would make sure that their granddaughter was well provided for.
A self-typed 1-page letter served as the only document that the 15th Chief Justice of the U.S. Supreme Court, Warren Burger, left behind to provision his assets. Incredibly, even the most powerful judge in the country did not take the time to create a last will and testament. Because he did not hire an estate planning professional, his family had to pay $450k in estate tax and pay additional legal fees to go to court and administer his estate. The fees could have been avoided if Burger had formed a trust, or gifted the assets to his family.
Though Olympic sprinter Florence “Flojo” Griffith Joyner allegedly made a will, it was never located. Because her husband was unable to find the document, he had to battle her mother legally over Flojo’s wishes. Her mother claimed that her daughter promised that she could stay in their marital home indefinitely. A 3rd party was appointed by a judge to administer the estate.
Hotel tycoon Leona Helmsley died in 2007, leaving $5 billion to charity and a $7 billion trust to her Maltese, Trouble. Two of her grandchildren were left out of the will entirely. They sued the estate, alleging Helmsley was not mentally able to establish a will and trust and won a settlement of $6 million plus legal fees. Trouble’s trust fund was decreased to $2 million. When she died in 2007, her annual living expenses were an estimated $190k. The remaining balance of the $2 million trust went to charity.
In 1993, tobacco heiress Doris Duke passed away and left her butler as executor and trustee for a charitable foundation. Responsible for the management of $1.3 billion, his questionable lifestyle and spending habits led to his removal from duty by a probate court. A board of trustees was then selected to manage the foundation after an expensive legal battle, which cost the charities.
After her death, famed sex symbol Marilyn Monroe left most of her estate to her acting coach Lee Stramburg. He received three-fourths of Monroe’s estate, which went to his third wife after his death. She did not know Marilyn and hired a licensing company, auctioned Marilyn’s belongings and sold the rest of the estate to a branding company for $20 to $30 million. If Marilyn had set up a trust for Stromberg and named her estate to someone else who could maintain it, then it would not have been left in the hands of a complete stranger.