The rich and famous have access to the best lawyers in the country, so it always comes as a surprise when celebrities end up having error-ridden estate plans. Here are two recent examples of this:
When Robin Williams passed away in August, he left behind three children. Williams’ estate plan included a trust for his three children, in effort to make sure that what he left for them and other sensitive information remained private.
However, before Williams died, one of the co-trustees that he listed on the trust document also passed away. As a result, the trust was made public and Williams’ children were not afforded the privacy that the actor/comedian intended.
Williams could have avoided this by updating his estate plan after the co-trustee passed away, though he probably had no way of knowing that his privacy wishes were in jeopardy. For that reason, it is a good idea to update estate plans regularly to avoid potential problems like this that could arise simply because of the passage of time.
Philip Seymour Hoffman is another famous actor whose tragic death last February led to estate planning complications. Hoffman left his entire estate to his longtime girlfriend and the mother of his children, potentially as a way of keeping things simple and preventing his children from becoming “trust fund kids.”
However, the move backfired. Because Hoffman and his longtime girlfriend were never legally married, his estate has had to go through the long and expensive process of public probate, and will be subject to estate taxes.
A better move would have been to create a trust for his children that was not available to them until later on in their lives. He could have also created a trust providing for his girlfriend throughout her lifetime. Marrying his girlfriend could have also simplified things immensely.
Undoubtedly, the tragic deaths of Robin Williams and Philip Seymour Hoffman left their families in a world of hurt, but their unfortunate estate planning errors only added to the pain. These two examples show just how important an effective estate plan is.