Celebrities often make the same mistakes that other people do when planning their estates in Washington. Because these individuals often have high net worths, the consequences can be much worse. Luckily, you can learn from some of them like Prince, Michael Jackson and James Gandolfini.
Prince’s mistake – Not having estate planning documents
Prince died in 2016 without leaving behind one of the most important estate planning documents: a last will and testament. This meant that his assets, which were worth more than 156 million dollars, were left to be divided following Minnesota’s intestacy laws. He had six siblings and half-siblings and a federal inmate that claimed to be his son at the time. The court had to take care of all his affairs before finally giving the rest of his assets to his legal heirs. The late singer’s estate was settled six years after his passing.
Michael Jackson’s mistake – Failing to fund a trust
Michael Jackson created a trust in 1995 when he was just 37 years old. The purpose of the trust was to provide for his three children and their mother, but he failed to fund it. This meant that when he died in 2009, his entire estate – which was valued at half a billion dollars – went through probate. The process took almost four years to complete and cost his family millions of dollars in fees and taxes.
James Gandolfini’s mistake – not planning for foreign property
When James Gandolfini died in 2013, he left behind an estate that was worth more than $70 million. He had property in the United States and Italy, but he didn’t have any plans for what would happen to it after his death. As a result, his family had to go through the process of probate in both countries. This delayed the distribution of his assets and cost his heirs almost $30 million in death taxes.
Most people don’t think or prepare for their death until it’s too late. From the examples above, the government can take up to 40% of your assets in the form of death taxes, or your heirs can wait up to 6 years to receive their inheritance. But by meticulously planning and updating your documents, all these pitfalls can be avoided.