Just as you’re not obligated to call your mother on her birthday, you’re not required to leave a will. As hard lessons teach, however, it’s advisable to do both. Even the rich and famous (whom you’d expect to know better, given their access to capable advisers) mess up estate planning, leaving a legal nightmare for their heirs (or those who claim to be).
First, however, a little background.
What’s at Stake if You Don’t Leave a Will
If you fail to leave a will, your estate will be distributed to your “heirs at law,” as prescribed by the state where you last resided. State laws vary, but heirs at law are typically your closest living family members. The devil is in the details, however.
For example, you might think that if you die before your spouse does, then your entire estate will go to him or her. Will it? Maybe. In Massachusetts, it will depend on two factors: (a) whether either of your parents is still alive, and (b) whether you or your spouse had children from another relationship. If a parent or a child from a prior relationship is alive, they will receive a share of your estate along with your spouse. In a different case, where your spouse and all members of your immediate family have died, your entire estate may go your distant cousins—if your Personal Representative can find them.
Without proper estate planning, you will create unnecessary difficulties for those who are left to sort out your affairs. Worse still, you risk your property being transferred contrary to your expectations. Along the way, your heirs might also incur a larger tax bill than they would have if you’d planned better during your lifetime.
Here are three cautionary tales of well-heeled celebrities whose families were forced to untangle messy estates. Don’t let this happen to those you love!
Prince’s Supposed Heirs Duke It Out Over His Multi-Million Dollar Estate
Earlier this year, the IRS resolved a multi-year legal dispute in valuing the estate of Prince Rodgers Nelson, popularly known as Prince. The music icon, who died in 2016, left an estate valued at $163.2 million. He had no spouse and no children. More than thirty people submitted claims. Finally, after six years of litigation, the courts named Prince’s sister and his five half-siblings as his heirs. Had Prince availed himself of tax-efficient estate planning, he might have substantially reduced or deferred the amount owed to the IRS—and to lawyers.
Multiple Wills Leave Aretha Franklin’s Estate in Limbo
As you grow and your relationships and assets change, you should update your estate plan. But your heirs might run into trouble if your new will does not properly revoke your old one. Consider Aretha Franklin, who had no problem writing a will. After her death in 2018, three handwritten wills were discovered. The wills competed with one another, and they were also difficult to understand: They featured deletions, interlineations, marginalia, and an overall robust, if messy, understanding of her complex estate.
Franklin’s four children brought the matter to court over which will should be recognized, who should administer the estate, and how her assets should be managed. The hearing, scheduled for June 2020, was delayed by the pandemic. Meanwhile, a fourth will, this time typed, unsigned, and marked as a draft, was discovered. An IRS dispute over a nearly $8 million tax debt was just settled this month. The rest of the estate has yet to be distributed.
Franklin’s estate was probated in Michigan, but it’s worth noting that, if Franklin had died in Massachusetts, the matter would have been further complicated by the fact that Massachusetts does not recognize holographic, or handwritten, wills, unless certain legal requirements are met (such as that the will is signed before two witnesses who can attest that no fraud was involved). Even if it reflects your most recent wishes and matches your handwriting, a holographic will in Massachusetts might not be deemed valid.
Without a Will, Picasso’s Heirs Competed for His Art
The art of Pablo Picasso is among the most demanded, reproduced, licensed, admired, imitated, stolen, and counterfeited in the world. When the artist died in 1973, his failure to leave a will created a logistical nightmare. Suddenly, his heirs were left to account for the tens of thousands of paintings, sculptures, drawings, prints, and ceramics that he created and exhibited worldwide. Who, exactly, were his heirs was also unclear: Picasso had four children with three women, only one of whom he had married.
Strained relations resulted in Picasso’s heirs meeting about 60 times in 1973 alone to discuss administration of the estate. Eventually in 1989, his son Claude was appointed legal administrator. In 1996, a French court established the “Picasso Administration,” again headed by Claude. The Picasso Administration continues today to handle the authentication of Picasso works as well as to manage intellectual property rights.
No matter the size or complexity of your estate, it’s worth sparing your heirs these inheritance nightmares with tax-efficient estate planning that carries out your wishes after you’re gone. At Mountain Dearborn, I and my colleagues would be pleased to help you create the plan that suits your needs.
Image: DJ Johnson