Learning From Celebrity Mistakes

Posted by on Feb 14, 2014 in Estate Planning

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“THE LEGAL CORNER”

By Sam A. Moak 

Learning From Celebrity Mistakes

 The information in this column is not intended as legal advice but to provide a general understanding of the law. Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstance.

 Normally, I would never tell anyone to look to a celebrity for guidance. However, in this instance perhaps we can learn from their mistakes. What do Princess Di, Marlon Brando, Heath Ledger, Jimi Hendrix and former Supreme Court Justice Warren Burger have in common? They all flubbed their estate planning, costing intended heirs money and/or grief.

 The mistakes these folks made run the gamut. Jimi Hendrix died without a Will, leaving his close brother Leon with nothing. Supreme Court Chief Justice Warren Burger wrote his own Will, which at 176 words left out basic tax clauses that could have saved $450,000.00 in estate taxes. Princess Di relied on a “letter of wishes” to give away belongings, and her godchildren got shortchanged.

 However, take Paul Walker, star of the Fast & Furious movies. Paul Walker’s Will was signed in August of 2001, when he was only 28 years old. This is the same year his first Fast & Furious movie was released. Walker is to be commended for preparing a Will and Trust at a young age, before he was a well known movie star. Far too many adults in this country wait until “someday” to prepare even a basic Will. No one should ever procrastinate with estate planning! Walker certainly didn’t plan to die in a car accident.

A Will is not a static instrument. To serve its purposes, it must keep current with life changes, including an individual’s financial circumstances, and with some external factors, such as tax laws. With the help of a professional, you should periodically review your Will, staying alert to new or different circumstances that might call for updates.

 While Walker gets kudos for planning ahead, he loses points for failing to update his estate planning documents before he died. His death was more than twelve years after he signed his Will. There are too many changes in life over the course of twelve years, especially when Walker’s net worth grew so much during that time, to rely on the same old documents. Perhaps Walker would not have wanted his young daughter to inherit his total wealth. Perhaps he would have wanted his girlfriend of 7 years, Jasmine Pilchard Gosnell, or his parents to have a portion of his large estate; or, perhaps there were charities he would have benefitted. What if Walker’s parents were not physically able to act as executor or guardian? These are all reasons to revisit and update estate planning documents.

 Letter of Instruction

Even the best-drafted Will is not likely to cover everything needed for a smooth disposition of your estate. To supplement the Will, consider executing a letter of instruction. It generally is not legally binding, but it can go a long way to expedite the process and provide information not to be found in the Will.

Some items appropriate for a letter of instruction include a list of bank, brokerage, and mutual fund accounts; directions on where to find important documents or personal property; user names, PIN numbers, and passwords necessary for access to electronic records; and contact information for legal and financial advisors. Be sure to list any life insurance policies, as beneficiaries will collect on those policies outside of the Will. Any advance plans for the funeral and burial also should be mentioned in the letter of instruction.

 Hiring an attorney to write your Will can help you ensure that the technical formalities of Texas law are followed and that your gifts are clear and easily understood. Spending a few dollars now will save your family and loved ones from spending more later. Not to mention the confusion and grief that will be avoided.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C. He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

www.moakandmoak.com

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