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FINANCIAL PLANNING
o Heath Ledger – Update your documents
The actor died in January 2008 having failed to update an old will created before his daughter was
born. As a result, Ledger’s entire $20 million estate went to his parents and three sisters. Fortunately, relatives revealed in late 2008 that all of Ledger’s money would go where he would have wanted — to daughter Matilda Ledger, whose mom is actress Michelle Williams.
o James Gandolfini – Know the local laws
James passed away unexpectedly while vacationing at his property in Italy. He had left instructions for that property to be given to his two children, but Italian inheritance laws dictate such disposition. Children are automatically given half and
his wife a quarter, meaning he only had the right to give away the last quarter — something his lawyers should have known.
o Robin Williams – Be specific with your tangible assets
Robin had done extensive estate planning including a prenuptial agreement and various trusts set up for the benefit of his third wife and children. He also specified that his tangible personal property (TPP) would be left to his children. His wife disputed this in court, challenging what could be reasonably included in the definition of TPP. Because there was no specificity in the estate plan, this was taken to probate court.
The above types of mistakes are more common than you may think. The examples provided are more well-known because they
are celebrities. There are a few learning lessons from the examples above that I want to point out. First, be sure to update your will, trust, etc. when necessary. Creating your estate plan is an excellent first step but sometimes things change. There have been several cases where one failed to update their beneficiaries and an ex-spouse or a deceased individual inherited a great deal of wealth when they shouldn’t have. Second, be sure to know your local laws. Every location is different, so make sure your attorney is knowledgeable on the area. Lastly, be specific with your tangible personal property. Word of mouth is not going to fly, so be certain that you have accounted for all your personal assets in your estate plan.
Here are some things for you to consider so you can ensure you have your estate plan in place:
o Consider hiring an estate planning attorney – when it’s all said and done, you are looking at a couple thousand dollars to get all your documents in place. You will need things like a will, revocable trust, and financial and medical power of attorney. Everyone is different. You might not need certain things that other people do, but there are the basics of an estate plan, and I would get those taken care of at the very least.
o Update your beneficiaries – as I mentioned prior, there are some horror stories of individuals passing along all their hard-earned money to a previous spouse or a sibling instead of their kids or desired heirs. A way to avoid this
is to simply update your beneficiary
forms.
o Organize documents/personal information – many people overlook this step. Organization is so important for your personal financial matters. When our clients sign up for planning, we give them a leather binder with sections for all the different quadrants of financial health. If you or you
and your spouse became victims of
an unforeseen calamity, your trusted relatives or advisors could access this binder and have all the necessary information to distribute your assets
to the desired location. I would highly recommend some form of organization.
o Keep your affairs in order – I know I’m mostly discussing the importance of getting your affairs in order but keeping them in order is instrumental. As you read above, there are some serious side effects to putting off an update to your estate documents.
For all of you horse owners: Who is going to retain ownership of your horses when you pass?
Who is going to feed and water them? Do you want someone to continue with your current operation? Have you designated a certain amount of money for the care of your horses and other animals?
These are all important questions. Maybe it’s not horses. Maybe you own cattle, and you want your children to carry on your legacy. An even more common question to ask is concerning your business if you have one. Do you have a succession plan in place?
If you haven’t done any sort of planning for what I’m discussing here, then you might feel a bit overwhelmed. There’s no need to panic. However, I do advise that you act
with a certain sense of urgency. This is not something you should put off for another few years. You may not enjoy having it handled, but you will reduce a great deal of stress by simply having a structured plan for you and your heirs.
There are certain firms that will help you with your financial planning and refer you to an estate planning attorney with whom they have built a solid rapport. Right off the bat you have professionals who are familiar with each other and can work together to make sure you are taken care of. Talk to a professional you are familiar with to get the ball rolling. This is something I highly recommend doing in order to plan for the unexpected.
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