James Gandolfini will be remembered for many things, and one of them might be surprise endings.
Fans of his Tony Soprano character will be forever perplexed by the sudden, jarring end to “The Sopranos,” the groundbreaking HBO series. In the middle of a tense scene in a diner, propelled by Journey’s “Don’t Stop Believin’,” the screen went black. Just like that, the series that had occupied the center of American pop culture was yanked.
Just as suddenly, Gandolfini left the world stage when he died of a heart attack after a day touring Rome last June. He left an indelible impression and a pile of money that even a Mafia don would envy.
Estimates place his estate at $70 million. He signed his will only six months before he died. He gets a point for having a will, but experts have been leaping on just about every other aspect of his estate planning. Or more accurately, his lack of expert planning.
Julie Garber, the wills and estates columnist for About.com, said many aspects of Gandolfini’s estate planning baffle her.
“Why did this man just have a will?” asked Garber, who is also vice president and senior trust officer of the Fifth Third Private Bank. “He should have had a revocable trust so that no one knew who was getting what. It was absurd that someone of his stature just had a will.”
For very public people who want to keep some things private, a trust keeps the estate from prying eyes because, unlike wills, the trust documents are not public. For example, in the case of former Beatle John Lennon’s estate, no one knows who got what because he had set up a carefully constructed trust.
“A reporter called me from New York about one of the famous estates,” Garber said. “And the reporter said, ‘It’s so irritating when they have a trust because we don’t know what the trust says.’ I was like, ‘That’s the point!’”
Gandolfini actually did have one trust, for his 13-year-old son, that was funded by $7 million in life insurance. The life insurance aspect also shielded the money from estate taxes.
The rest of his estate was not so lucky. In the patios of La Cosa Nostra, it got whacked. Well, semi-whacked.
Twenty percent went to his wife, who has an unlimited exemption as his spouse. The rest, above the $5.25 million exclusion in 2013, is exposed to federal and state estate tax. The federal bite is 40 percent, and it scales up from there with the state tax. Published estimates put the tax bill at $30 million.
Two other problems Garber had with Gandolfini’s plan were with the lack of planning. One concerns a house Gandolfini owned in Italy that he included in his will.
“I found it odd that he had a whole section on property in Italy in his U.S. will,” Garber said. “From my understanding, so many European countries have forced heirship that you need to have a foreign will that covers that. You wouldn’t put it in your U.S. will.”
Forced heirship is an ancient tradition in some countries, including Italy, where certain division is required of estates. The only U.S. state that requires it is Louisiana. It takes advanced planning to circumvent this rule if the client prefers another arrangement.
A limited liability company (LLC) is one way to handle an asset in those situations.
“There are ways around it like we have in the United States, such as setting up LLCs to convert property from tangible into intangible property,” Garber said.
The other point is that Gandolfini drafted his will soon after his daughter’s birth, which is commendable. But she gets her entire inheritance at age 21.
Think of yourself at 21. Now add several million dollars. Not a pretty picture.
At what age heirs should receive their inheritance is an issue for estates of any size, but few people plan for it. Attorneys and advisors all too often see the impact of sudden wealth on younger people. It is similar to how lottery winners burn their good fortune into ashes of regret soon after the big check is passed.
Philip Seymour Hoffman was a master actor finely attuned to the details of the characters he played. He was not so in sync with his estate planning. As with Gandolfini, he earns a point for having a will. And also like Gandolfini, he flubbed the second act, which led to a disappointing denouement.
Another similarity to Gandolfini was Hoffman’s surprise ending, dying in his Manhattan apartment at 46 with a needle in his arm. He left behind an estate estimated at $35 million, along with a big tax bill.
The first $5.34 million is excluded from federal estate tax, which is indexed for inflation. New York, however, exempts only the first $1 million. State laws are not even close to uniformity.
He left some of his estate in a trust for his son and the rest to Mimi O’Donnell, his longtime girlfriend and mother of his three children. He did not account for two of his children because he violated the third commandment of estate planning for the rich and famous: “Thou shalt update your plan.” (The first two are “Thou shalt draft a will” and “Thou shalt establish a trust.”)
Because Hoffman was not married to his girlfriend, she will not benefit from the spousal deduction of an additional $5.34 million. And apparently, he did not have life insurance, because O’Donnell’s lawyer said she wanted a quick resolution of the estate because she needed the money. Even the very wealthy should have life insurance for liquidity when the family needs it most. (Violation of the fourth commandment: “Thou shalt have life insurance.”)
Hoffman drafted his will in 2004 after his son Cooper was born. By not updating his will, he did not account for his two daughters born after 2004. He did set up a trust for his son, which pays him the total at 30. Garber said Hoffman’s 30 is better than Gandolfini’s 21, but it is still dangerous for the recipient.
“We’ve been recommending lifetime trusts,” Garber said. “Maybe make the child a co-trustee at 30 and give them control, but that way at least it’s in a trust. It’s not their money. If they get sued, if they get married and divorced, it’s in a trust. It’s not their money. It’s protected for them.”
There is also the option of graduated control. “Maybe at 30 become a co-trustee and 35 become a sole trustee,” Garber said. “But it’s so hard to tell when the kids are young how they’re going to turn out. We have trusts where people don’t get it until they’re 50.”
The problem of trust-fund train wrecks has spawned a new industry to help heirs. Estate planning attorney Richard Sugar of Chicago said his firm goes even further than helping control the wealth.
“We’re always looking for ways to preserve a person’s wealth and to make sure that it passes on to the next generation with as little diminution as possible,” Sugar said, adding that rich kids gone wild have a way of quickly diminishing wealth. “When I first started practicing, the routine way to distribute assets to heirs was to keep it in trust and pay a third at 25, a third at 30 and a third at 35. But the more I saw the consequences of that firsthand, the more I thought that’s really self-defeating.”
His office started an apprenticeship program to train heirs in handling the wealth before they take the reins. When is the age of responsibility? That depends on the person, of course, but Sugar used 35 as an example.
“If an heir is less than 35 and both parents have died, the heir is going to have a third-party trustee for a period,” which could be up to seven years, according to Sugar. “That trustee is charged with training the heir on how to use the trust money – how to budget, how to invest and how to pay taxes.”
The program provides the follow-through that would ensure that all the planning effort wasn’t for naught.
“It’s a way to preserve the trust vehicle,” Sugar said, “which has all kinds of tax benefits and creditor-protection benefits as well as giving heirs a sense of confidence that they can administer those funds correctly and won’t make mistakes and waste it.”
Creating a family office is another option for the very wealthy. It is a company set up to manage a family’s finances, but family offices offer more services ranging from household upkeep to travel arrangements.
The offices are expensive to operate, so it is an option only for ultra-high-net-worth families. But Sugar had another reason to avoid them.
“A family office continues to carry the responsibilities and discharges all those responsibilities that heirs need to be trained to perform for themselves,” Sugar said. “In some ways, the family office promotes indulgence, dependency and the suppression of ambition. We’re trying to promote the exact opposite.”
The type of trust ensures the legacy as well. In Hoffman’s case, Sugar was pleased to hear that he established a trust for his son, and if he was prudent, it would have been a dynasty trust.
“Dynasty trusts go on for many, many generations and it is particularly important with celebrities,” Sugar said, considering what it would have done for Hoffman’s son. “The dynasty trust would provide for the education and health needs, along with support, for his entire lifetime and when the son died it would pass on to the son’s children. And there wouldn’t be an estate tax ever again within the $5,340,000 exemption that Philip Seymour Hoffman would bless this trust with.”
The trust could grow beyond the initial exemption and still be shielded.
“That $5,340,000 set aside for Philip Seymour Hoffman’s son at the time of his death could grow to $20 million, and that $20 million would pass to his son’s children and not be subject to an estate tax ever again,” Sugar said. “Since the federal estate tax is 40 percent and state taxes could also be imposed at another 10, 20 percent on top of it, you’re talking about a significant reduction in wealth otherwise.”
It isn’t just cash and financial instruments that can go into the trust.
“If you put a copyrighted item into a trust at a time when you’re not terribly well-known, the value of that transfer is small, but when you become well-known and you’re No. 1 on The New York Times Bestseller List, that copyright suddenly explodes in value,” Sugar said. “But because it’s already embedded in the trust at a much lower value, that asset is protected and is available for the next generation at a much lower value and with very little tax consequences.”
If that book, that music master recording or those royalty rights were put in the trust when it was worth $10,000 and the value grew into the millions, that item would still remain $10,000 in the eyes of the tax man. And the work can still produce a revenue stream.
This is just one of the many ways trusts can be used and why estate planners love them. But they are still not universally used, particularly in New York, where many of the largest estate messes reside.
One of the most New York of New Yorkers, Ed Koch, was one of them. When he was mayor of New York City in the 1970s and ’80s, he would famously ask constituents, “How’m I doin’?”
In the case of his estate, his heirs can return a resounding “Meh.”
He left most of his estimated $10–$11 million estate to his sisters and three nephews whom he adored. But they will be receiving $3 million less because of the estate tax bite.
It was another case of not having a trust that would have helped shield his estate from prying eyes and some taxation, depending on its structure.
But it’s not the New York way. West Coast celebrities seem to get the trust concept, although some do a half measure.
Take the case of the “Fast & Furious” actor Paul W. Walker IV, who happened to have met a fast and furious end in a speeding Porsche. He had a trust, but it didn’t have anything in it. Consequently, his pour-over will funneled his $25 million estate into the trust. Trusts are typically funded in life with the pour-over will directing the remainder into the trust, which saves probate costs and avoids public scrutiny.
Walker did draft a will early, when he was 28, around the time he did his first “Fast & Furious” movie. That and the five that followed (soon to be six) made Walker very wealthy, but he did not update his estate plan in the intervening dozen years. Because the trust is private, we don’t know how well the old structure supported the new wealth, but we do know that a plan needs more periodic updating to reflect new factors.
Another thing we know is that he named his mother as guardian of his 15-year-old daughter Meadow, rather than the girl’s mother, who is reported to be an alcoholic. Overriding parental rights is always difficult in court and, in fact, Rebecca Soteros did get custody of her daughter in late March, pending a successful rehab stint. The lesson there is if there is not an agreement in life, sometimes the will won’t get it done.
Another way to place wishes on precarious footing is to scribble them onto a will. That’s what Beastie Boy Adam Yauch did.
When he died of salivary gland cancer at age 47 in 2012, his will revealed this section: “In no event may my image or name or any music or any artistic property created by me be used for advertising purposes.” Yauch had handwritten this part, “or any music or any artistic property created by me.”
Yauch’s inclusion might have overstepped his rights, because the note was claiming a copyright over his artistic work. But as we all know it was The Beastie Boys – so others shared ownership.
If the others shared his sentiment, and the odds are good they did, then his wishes may be carried out. If not, chances are good they won’t. It’s an instance of someone amending a legal document without good legal advice. Lawyers have said it would be unusual to have mixed publicity rights with copyright in the same sentence.
Yauch’s situation also seconds the lesson that an agreement in life is more likely to carry forward after death.
Otherwise, Yauch had a simple, straightforward plan for an estate valued at $6.4 million, according to reports. Some other celebrities left a far more complicated situation that can take families several years to untangle.
For example, who knew that the thump-thump-thump of disco music was basically the sound of a printing press making stacks of money?
The phrase, “Stayin’ Alive, Stayin’ Alive, hah, hah, hah, hah, stayin’ aliiiiiiiiyiiiiiiiihiiiiiiiihiiiive!” has driven millions mad,but apparently it also helped generate many millions of dollars (or pounds) for Robin Gibb before he died of colorectal cancer at age 62. Although he didn’t exactly stay alive, he did manage to leave an estate estimated at $43 million.
Because of Gibb’s many properties, it took a while to unravel the entire estate, which was initially estimated at $148 million. Another complication involved his family life. Apparently while in his second marriage, he had what the media likes to call a “love child” with a housekeeper. Gibb did not leave the mother or child a monetary bequest in his will, but he gave them about $6.5 million as a gift before he died, according to reports. He also left the mother a house valued at $1.25 million. All of which made for two bitter children from his first marriage, who got about $780,000 each. That prompted one of them, Robin-John, to respond with the Clintonesque Facebook post, “Dad never slept with that woman,” along with some rude characterizations.
Not only do disproportionate bequests leave bitter feelings, but they also fuel years of legal fights. So, just because people think they have the last word in a will, others might beg to differ, in court.
Although disco and rap seemed to have paid well, punk rock was not so remunerative. At least that was the case for Johnny Thunders, the guitarist for the genre-defining, gender-bending New York Dolls. The band blasted out of the early 1970s, influenced a generation of rockers and then burned out just as quickly.
He banged around in a couple of bands and on his own until he met his end in New Orleans’ French Quarter, curled up under a coffee table in his hotel room. The autopsy showed he mixed methadone and cocaine and may have had leukemia. Others said he was beaten to death for his methadone.
The punk-rock life left little time for estate planning and, needless to say, he wasn’t terribly careful about his money. He apparently didn’t think he would need to bother with a will or a trust for the $4,000 he had left. That might have been the sad story of another artist living fast and dying young, if it weren’t for his sister, Mariann Bracken.
She turned out to be the heroine because she was named administrator and grew that tiny seed into an estate worth hundreds of thousands of dollars. It paid out twice to Thunders’ heirs, including two sons he had with his estranged wife and a daughter he had with a Swedish groupie.
When Bracken died in 2009, the estate was thrown into chaos once again. The daughter had expected to take over the administration, but could not afford the $75,000 bond, so the estate has just been lying around. Thunders’ two sons are trying to take over the estate when they are not busy languishing in prison. Vito got out of maximum-security prison in New York fairly recently. Dino apparently is also out of jail in Texas.
They plan to enlist the help of their mother. As soon as they can find her. They have no idea where she is and have hired a private detective.
So, even on the path to self-destruction, it’s always a good idea to take a moment to do some estate planning.
All the way over to the complete opposite side of the wealth spectrum was William M. Davidson, the Detroit Pistons owner who left an estate worth between $2.2 billion and $5.5 billion, according to wide-ranging estimates, when he died at age 86 in 2009.
He was an industrialist who bought the floundering Pistons and grew it into a successful, and pampered, basketball team with a palace of a stadium. Davidson said he would never sell the team and expected it to remain in the family.
The story followed a familiar theme after he died and the Internal Revenue Service submitted a $2.8 billion estate tax bill, which some say might set a record. The family needed liquidity in a hurry and sold Palace Sports and Entertainment, which included the Pistons and the stadium, supposedly for $325 million. It was a nice return for the $8 million Davidson paid in 1974, but the price was at least $100 million under value, according to some reports.
It is a familiar problem for asset-rich estates. Besides sophisticated trusts that can best employ tax advantages, a good answer for many of these problems is life insurance. The message is getting through to some people. A recent $201 million policy made the Guinness World Records, although others say bigger policies have been sold but not publicized.
There might not be reinsurers nervy enough to cover a $2 billion policy, but maybe that’s not too far off.
Then there are the estates that might defy planning altogether. In the case of Evel Knievel, any advisor would have faced some stiff challenges.
When the legendary stuntman died at 69 of pulmonary problems in 2007, he named his second ex-wife as the sole beneficiary. For the honor, she inherited about $12,500 in assets. He left only memories for his five children and successive generations.
Even if they were to profit from his image, a court judgment hangs over the proceeds. That had to do with an incident that occurred in the 1970s.
Shelly Saltman had an insider’s perspective of Knievel because he helped promote Knievel’s famous Snake River jump as his press agent. He used that perspective to write a book about the experience in which he detailed Knievel’s abuse of drugs and family members.
Knievel was not happy and awaited Saltman in the parking lot of a studio in Southern California to express his feelings. Saltman approached Knievel and was pinned down by two people as Knievel swung an aluminum baseball bat at him. Saltman managed to wrest one arm free and blocked his head. His head was saved but his arm was shattered.
A judge awarded Saltman $12.75 million in a subsequent lawsuit. Knievel declared bankruptcy and never paid it. But ignoring the judgment didn’t make it go away. It just passed the problem on to the estate. Saltman is going after the estate for more than $100 million, which he said has accumulated in interest.
The case inspired The Associated Press to report: “Of all the bones Evel Knievel broke over the years, the costliest may have been the left arm of a PR man by the name of Shelly Saltman.”
So, no company would have covered Knievel for life insurance, unless it was a stunt in itself. He seems to have been bent on self-destruction on or off the motorcycle ramp. The only real lesson to come out of this case is a twist on the Google credo: Don’t be Evel.
JACQUELINE KENNEDY ONASSIS
Someone who probably maintained her privacy the most throughout her lifetime was Jacqueline Kennedy Onassis. She had a pour-over Will that made a few small distributions — like a personal item to Maurice Templeton – and funneling everything else to her revocable trust. It’s important that she still had a Will, in case her Executors needed to probate and capture some assets, but having everything poured into a revocable trust maintained her privacy. Jackie’s Will is held as an example of good estate planning.
What I find interesting for a person who maintained a lot of control during her lifetime, Jackie allowed her children, Caroline and John, to make the ultimate decision whether or not to fund her Charitable Lead Annuity Trust (CLAT). This trust was to be for the benefit of her private foundation, for 24 years, and then the principal would be distributed to her grandchildren, which made for good tax strategy and also fit with her philanthropic goals. While it’s understood why she gave the final decision to her children, as you want that sort of flexibility in an estate plan, I am surprised that she didn’t have a third-party tie breaker involved in the decision. Ultimately, Caroline and John decided against funding the Charitable Lead Trust, which meant more money for them, but it also increased the taxes due and short-circuited any philanthropic goals Jackie might have had.
If Jackie made a mistake, it might have been in her choice of fiduciaries. You have to be careful who you choose in these roles. She obviously trusted her children. Did they make the choice she would have wanted?
ROBIN WILLIAMS
Speaking of problems with fiduciaries, we turn next to Robin Williams. He appears to have had a pour-over Will and revocable Trust similar to Jackie O’s. Because his revocable trust is a private document, his bequests were private, but he did have two irrevocable life insurance trusts. Normally, we wouldn’t know much about these irrevocable trusts, but there were several issues with his trustees over the years. One trustee resigned, and the remaining trustee appointed someone who took the role but then later resigned.
Of the two irrevocable trusts, one was created prior to his adoption of his stepchild and the other when he had more children. He obviously wanted to take care of his children. This is excellent planning, and owning life insurance outside of his taxable estate certainly made a lot of sense. Many people don’t understand that life insurance is income tax-free, but it’s not necessarily estate tax-free.
Most of Robin Williams’ $35 million estate was locked up in a winery. This could have created liquidity problems for his estate, as the government wants to be paid its taxes within 9 months and you don’t want to be selling a winery at fire-sale prices. The life insurance provided an excellent source of liquidity for his estate to pay estate taxes.
One interesting note for Robin Williams: His Will apparently has a clause preventing Disney from using any outtakes of his voice in producing future Aladdin sequels until 25 years after his death.
JOE ROBBIE
Contrast Robin Williams with the estate of Joe Robbie. He was the owner of the Miami Dolphins and an attorney by education. He also had a pour-over Will and revocable trust, and he was survived by his wife and nine children. His big mistake was that his $100 million estate was mostly illiquid. He owned an NFL football team and a stadium. It doesn’t appear that there was a lot of thought put into the impact that estate taxes would have on ownership of the team.
Eventually, the team had to be sold to pay the estate taxes. The NFL clearly learned its lesson, and it appears that there’s more attention given the succession and the liquidity issues, because the league doesn’t want to be put in these types of positions where there has to be a fire sale.
JOAN RIVERS
Another recent celebrity death is Joan Rivers. She had a pour-over Will and a revocable trust, so everything is good from that perspective. What’s interesting is that her Will states she was a domiciled in California and only a resident of New York. What’s at play here is that New York has an estate tax, while California does not. She lived in New York because New York has less onerous income taxes than California, but, as she said in her Will, she planned to die as living in California to avoid the California estate tax.
This is obviously going to be decided by the Court, and it will be interesting to see how it plays out. She’s a celebrity, so maybe you could argue that celebrity rules apply, but I would say that that would be very difficult strategy to rely on for a normal person. Her estate was about $150 million; the difference between dying as a Californian versus as a New Yorker would be about $14 million in tax to be paid to New York. And of course her estate still would have to pay federal estate taxes.
This question of “where you live” is something that needs to be carefully managed, especially for people who own real estate in multiple states. The rule is that you can’t stay more than six months and a day in any one state or you’re assumed to be domiciled in that state.
WHITNEY HOUSTON
This brings us to Whitney Houston. She died in 2012, but her estate became even more complicated with the 2015 death of her daughter, Bobbi Kristina. Whitney Houston’s estate is somewhere around $20 million, though there is speculation that it might be in excess of $100 million.
She wrote a Will in 1993, a month before Bobbi Kristina was born. That makes sense — if you’re going to have a child, create a Will and make sure to address guardianship issues. She did two codicils, and she also made changes and additions in the year 2000. It’s a very simple Will that left the majority of her estate in Trust for Bobbi Kristina, to be distributed 10 percent at age 21 and then another percentage at 25 and the balance at age 30. In the event that Bobbi Kristina died and didn’t have children, then the estate was to be divided among her mother and Bobby Brown, her husband at the time. A small portion was to be put in Trust for her brothers. When she and Bobby Brown divorced in 2007, the bequest to Bobby Brown was made invalid, so he would not receive money under the Will.
Then Bobbi Kristina died at the age of 22. She had vested in 10 percent of the estate, but the balance of the estate, since she didn’t have children, is going to go to Whitney’s mother, Cissy, and to her brothers in trust. I don’t see any evidence that Bobbi Kristina had a Will, and, if so, she died intestate, which means that her property would pass to her father, assuming she didn’t actually marry that gentleman who claims to be her spouse in social media.
It’s interesting that Whitney Houston didn’t update her document after Bobbi Kristina was born. She didn’t have a private estate plan like a pour-over Will and a revocable trust. She also didn’t update her plan after her divorce in 2007. Clearly, she trusted her mother with managing money but not her siblings. Honestly, her plan became more interesting when Bobbi Kristina passed away at such a young age. It certainly was not anticipated.
Frequently I talk to people who are heading towards making the same mistakes as the celebrities we’ve discussed. These mistakes include liquidity issues, lack of life insurance, underuse or overuse marital deduction, not properly addressing property outside the United States, and business succession issues. Some might not fund their trust while they are living, or some may not choose the right trustees to execute their wishes.
The key takeaway is that everyone should properly plan for their estate and the distribution of their assets to their heirs. The cornerstone of this is a Will, but, to the extent that you want to maintain privacy, you might want to create a slightly more sophisticated plan and involve a revocable trust.
Celebrities, they're just like us. At least, they are when it comes to estate-planning mistakes.
You'd think that high-profile individuals with substantial and varied assets, often-complex family lives and a team of high-powered advisors at their disposal would have this locked down, more so than your average American. But that's not so, attorney John Scroggin, a partner with Scroggin & Company in Roswell, Georgia, told advisors Thursday at the Financial Planning Association's annual conference in Baltimore.
"Celebrities make the same mistakes," he said. "It's just that the nature of their celebrity exaggerates and balloons the impact of what the mistake was."
Mistake #1: Not having a will
Nearly two-thirds of Americans don't have a will, according to a July survey by Harris Poll for Rocket Lawyer, which queried 2,000 consumers. Famous individuals who have died without a will, include Abraham Lincoln, Prince, Sonny Bono, Jimi Hendrix and Pablo Picasso, according to Scroggin.
Not having a will can result in a number of potentially disastrous consequences, notably that assets may not be distributed in the manner in which you would have liked — or even intrafamily battles. State intestacy laws will apply, and dictate who gets what share of the estate. (State law often cuts out stepkids, for example.)
Without specific instructions from the deceased, an estate may also be subject to drawn-out court battles as family members fight for what they perceive as their fair share.
"A lack of a will for any individual increases the conflict and increases the cost," Scroggin said.
Mistake #2: Not having a current will
Signing a will is the beginning of the process, not the end, Scroggin said. Regularly update estate planning documents and beneficiaries as your financial and personal situation changes.
He points to the estate of singer Barry White, who was separated but not divorced from his second wife at the time of his death. His wife got everything, Scroggin said, while White's live-in girlfriend of several years got nothing.
Mistake #3: Not planning for taxes
Even if your wealth falls under the federal estate tax threshold — in 2016, up to $5.45 million per person is exempt — it may be subject to state estate taxes, which often have lower caps.
Poor planning could force your heirs to sell valuable or sentimental items because they don't have the liquid assets to pay those taxes, said Scroggin. He used the example of Joe Robbie's family, which sold its stake in the Miami Dolphins and Joe Robbie Stadium to pay estate taxes.
Mistake #4: Not mentioning for personal property
Robin Williams's family has engaged in a legal battle over the late actor's film memorabilia, Scroggin said, while Martin Luther King Jr.'s children fought over his Bible and Nobel medal.
Individuals often fail to account for personal property in their estate planning, which can generate plenty of fights (legal and otherwise) over the future of family heirlooms, collectibles and other items of sentimental value.
Even when such items are mentioned, Scroggin said, it can be difficult for heirs to prove provenance if another party disputes the claim — that this is mom's vase, for example, and not a newer one the deceased gifted to his second wife.
Scroggin also had some advice on this point for clients untangling the estate of someone recently deceased: "Change the friggin' locks."
It's not unusual for family, friends and neighbors to help themselves to items they say the deceased told them they could have, he said.
Monumental Estate Planning Blunders
To riff off the lyrics of a song by the late Notorious B.I.G.: more money, more problems. While that's certainly true in life, the problems compound after death as creditors, heirs and the Internal Revenue Service come calling for their share of an estate.
The twin burdens of fame and fortune don't make estate planning any easier. If anything, having all the money in the world only complicates everything. Whether due to hubris, bad advice or just plain not planning on dying, celebs make the same mistakes as regular folks and then some. Read on to learn about the estate planning mistakes of five wealthy stars.
Leona Helmsley
The infamous "Queen of Mean" may have died with a truly high-class problem: dying with too much money to comprehend. The widow of real estate magnate Harry Helmsley was a multibillionaire, and at the time of her death intended that her estate provide for the care of dogs "and such other charitable activities as the trustees shall determine," according to a 2009 article in The New York Times.
"She gave $12 million in trust for a dog, and at the same time, she cut out two of her grandchildren," says Herb Nass, a New York-based attorney and author of the book "The 101 Biggest Estate Planning Mistakes."
"She was an enormously wealthy person, and for her to leave so much to a dog and nothing to two grandchildren just makes me think she did not quite understand the extent of her wealth in some ways," he says.
A judge subsequently reduced Trouble's trust fund to $2 million (the dog has since died), and the disinherited grandchildren received a $6 million settlement.
Sammy Davis Jr.
Singing and dancing legend Sammy Davis Jr. died in 1990. He was a member, along with Frank Sinatra and Dean Martin, of the iconic Rat Pack. Despite a long career in show business, acknowledged posthumously with a Grammy Lifetime Achievement Award, Davis' estate had dwindled from his heyday to the time of his death. When he died, he left behind a large tax bill that the estate was unable to pay
"He had a will that was very generous to a lot of people, and at the end of the day when he died, his estate was insolvent. Basically, the debt exceeded the assets," says Nass.
Steve McNair
Young people at the top of their game have every reason to believe they have plenty of time to plan for death, but for too many, that's not the case. "Here in Nashville (Tenn.), the quarterback of our pro football team, Steve McNair, was shot by a girlfriend, and turns out he had no documents," says Howard Safer, chief executive officer of Argent Trust Company of Tennessee.
McNair left behind a wife and children, in addition to his mother whom he was supporting. One consequence of his untimely death was the displacement of his mother from the 45-acre six-bedroom home McNair had purchased for her, according to a blog post by North Carolina attorney Sabrina Winters. His estate was also hit with a massive tax bill as a result of not planning, according to a 2012 report by Estate Planning Source, which prepares trust documents to its network of attorneys.
In March 2012, McNair's widow petitioned the probate court in Tennessee to get $3.7 million released from the estate in order to pay federal and state estate taxes, Estate Planning Source reported.
Marilyn Monroe
Some celebrities have erred by not going far enough with their estate planning. For instance, famous actress and model Marilyn Monroe left most of her estate to her acting coach, Lee Strasberg.
"She left him three-fourths of her estate, and when he died, his interest in Marilyn's estate went to his third wife, who did not even know Marilyn. Marilyn's mistake was not putting her assets in trusts," says Nass.
Strasberg's third wife, Anna, eventually hired a company to license Monroe's products, which involved hundreds of companies including Mercedes-Benz and Coca-Cola. In 1999, many of Monroe's belongings were auctioned off, including the gown she wore to President John F. Kennedy's birthday party, for more than $1 million. Strasberg ended up selling the remainder of the Monroe estate to another branding company for an estimated $20 million to $30 million, according to a remembrance of the star by NPR in 2012.
It's unlikely Monroe would have wanted someone she didn't know to profit so handsomely from her belongings. A trust would have provided for Strasberg while he was alive and then after his death could have directed the remainder of her estate to someone of her choosing.
Jim Morrison
Similar to Monroe's misstep, Jim Morrison, the iconic singer from the '60s band The Doors, left his estate to his girlfriend, or common-law wife, Pamela Courson, who then died shortly thereafter with no will. "So Jim Morrison's estate went to the father-in-law that probably hated him," says Nass. "(Courson) died from an overdose, and then her estate, including the interest in Jim Morrison's estate, went to her parents," says Nass.
Morrison's parents contested the distribution of their son's estate following the death of Pamela Courson. According to an article in People magazine from 1980, the Coursons and Morrisons split royalties and earnings from Jim Morrison's estate.