Believe it or not, everyone has an estate.
Your estate is comprised of everything you own. This may include your savings and checking accounts, investments, real estate, life insurance and even furniture and personal possessions.
Estate planning, put simply, is making a plan to distribute your belongings according to your instructions and wishes when you pass away.
Here are 5 celebrity estate planning disasters that can help us learn to set up our estates in a more effective way.
Jimi Hendrix teaches us that even young people need a will.
His father, Al, inherited his estate and earned the rights to his music. Al managed and grew his estate to $80 million.
Hendrix’s close brother Leon was left with nothing and took the issue to court. Leon and the rest of Hendrix’s family didn’t receive any money and his father left the entire estate to his daughter from another marriage.
If you have anything you want to be distributing in a certain way to certain people, it’s important to have a will and last testament. Otherwise, your estate will be distributed according to the default procedures of your state.
Chief Justice Warren Burger shows us that even lawyers need professional help writing their will.
His family had to pay $450,000 in estate taxes in additional to legal fees to the court to administer the $1.8 million estate.
The fees and much of the tax could have been avoided if Burger had created a last will and testament and used the strategies of a planning professional.
Heath Ledger teaches us the importance of updating our documents anytime we have a big life event.
His will was created before he had his daughter, Matilda Rose with Michelle Williams.
His parents and sister were named as his beneficiaries but promised to take good care of his family. Without an up-to-date will, it’s impossible to know for sure how someone wants their assets distributed.
Leona Helmsley shows us it’s important to get our sanity checked.
Her grandchildren were left out of the estate entirely and sued under the pretense that their grandmother was not mentally fit to establish her estate.
The case was settled and Trouble’s fund was decreased significantly and the remaining balance was split between the grandchildren.
The moral of the story is, if you want to do something shocking with your estate, make sure to get a sanity check signed by a doctor first.
“Flojo ” shows us a will is no good if no one can find it.
Her mother claimed her daughter had promised that she could live in their home indefinitely and her husband battled her in court.
To resolve this, a third party was appointed to administer the estate. Make sure more than one person you trust knows where to find your will. You might also want a copy filed with your lawyer for safe-keeping.
Ashley Feinstein Gerstley is a money coach and founder of the Fiscal Femme where she demystifies the world of money and personal finance. Get her exclusive how-to guide “30 Days to Financial Bliss“ – free for GoGirl Finance readers.