What do they have in common?
Aretha Franklin, Bob Marley, Prince, Amy Winehouse, and now Tony Hsieh.
These celebrities are all members of an unfortunate club: they all died without an estate plan, also known as "intestate" estates. While intestacy results for many non-celebrities every year too, the lessons to be learned are always even more poignant in a celebrity context where complex and significant assets are at stake.
What issues arise?
When a celebrity dies without an estate plan, they inevitably create some of the issues below.
Who is in charge? A typical Will names an Executor - the individual or entity charged with organizing and managing the assets and liabilities of the estate, filing documentation with the Court, and ultimately distributing assets to the rightful heirs. Without a named Executor, disputes can arise from those with vested interests in the deceased's estate as to who should be appointed to serve.
Who did the deceased intend to benefit? Unfortunately, without a valid Will, the deceased's wishes are not expressed in a legally binding document, so the Court often resorts to state laws on intestacy to determine the "heirs at law." This very often will not align with the deceased person's intentions or their surviving loved one's expectations. Without knowing the deceased's intentions, the Court will make the final determination on the manner in which assets are distributed, but this question can be especially difficult where the assets and liabilities of the estate are unique (like artwork or music rights), complex (like real estate holdings or businesses), or significant in value.
Is the process private? All of these issues must be answered in a public forum - the county clerk of court Estates Division/Probate Division. Therefore, the assets are publicly listed and must be filtered through the court system before they can be distributed to the determined beneficiaries.
What lessons can we learn?
There are a number of important takeaways when celebrity estate planning mistakes make headlines.
Estate Planning Matters. Regardless of size or complexity, a lack of planning can result in delayed distributions, frustration and chaos for surviving family members. They are left to pick up the pieces of an entirely avoidable mistake.
The Best Time to Plan is Now. It is never too late to start planning. Even if planning has been avoided in the past or if years have passed since an estate plan was reviewed, it is still possible to meet with an attorney and sort through these issues, assuming there is testamentary capacity.
Keep it Private. The public nature of these disputes can be mitigated with the use of proper estate planning techniques, such as a trust which ensures a private transfer of assets out of the public eye. In our very public society, even non-celebrities can appreciate the privacy a proper estate plan affords.
