Celebrities Who Die Without a Will Leave a Dubious Warning
How could a musical genius worth millions of dollars in real estate and tangible assets, not to mention millions more in the value of his intellectual property, not have a will or estate plan? How could this individual who must surely have had countless lawyers, accountants, consultants and other advisors in his employ never been compelled to prepare a will or estate plan? With so much to protect it’s inconceivable that this man died without a will, or is it?
If you think this is about music legend Prince who died this past April, you are right, but only in part. This same story is true for music legends Jimi Hendrix, Bob Marley, Amy Winehouse as well as countless other celebrities. The media has not been bashful about publishing the unseemly battles between potential beneficiaries over money, licensing, recording rights, even the celebrity’s name and likeness. In most of these cases, the battles have gone on for years – some longer than 30 years.
We’ll probably never know the reasons why these ultra-wealthy people didn’t have an estate plan – but it may be one of the same reasons many of us don’t have one. Studies have indicated that more than half of Americans don’t have a will. Perhaps it is because we don’t want to deal with the emotional angst that comes with facing our own mortality, or we think we will have plenty of time to prepare, or perhaps there is a lack of trust with our family members and advisors. But the family feud isn’t the worst potential outcome of dying without a will. Not having your assets go where you would like them to is the biggest misfortune.
It’s important to note here that your heirs may not necessarily get all of your assets anyway. If you hold a significant portion of your net worth in retirement accounts or life insurance policies, for example, the assets will pass to the beneficiaries you designated on these policies. Also, some financial accounts may have a “transfer or payable on death” designation which means the account will pass to the beneficiary you designated on the account. If you title an account in joint name with another individual, ownership of the account will pass to the surviving joint owner. In all of the above cases, the assets will pass to the beneficiaries you designated on the accounts regardless of what your will may or may not say. [See also Will the beneficiaries named in my Last Will and Testament receive all of my assets?]
Every state has its own laws governing the distribution of assets when there is no will. In Pennsylvania, if you have a spouse, but no children or surviving parents, your spouse will receive your entire estate which may be the desirable result. But, with no will, if you have children or surviving parents, they will each get a share which then reduces the spouse’s share of the estate. If there is no surviving spouse, Pennsylvania outlines an inflexible “pecking order” of who gets what. Children and grandchildren get first dibs, but if you have no children, parents are next in line. If you have no surviving parents, then the estate goes to your siblings and their children. No siblings, nieces or nephews? Then come your grandparents. Aunts, uncles, and cousins are last in the line of relatives that may receive your estate. Finally, if you have absolutely no surviving relatives, the state gets all of it.
Now that we’ve discussed where your assets might go if you don’t prepare a will, it’s easy to see how possible it will be for those assets to end up where you don’t want them to go. This is known as the “doctrine of laughing heirs.” As you are being placed in your final resting place, heirs, who never liked you, are laughing at you for leaving them property you would never have left them if you had a will. For example, that cousin you’ve never even met could benefit from your death, instead of a beloved charity. And it’s not as uncommon as you may think for strangers to emerge from nowhere claiming to be your “love child” seeking their share of your estate.
It’s not just your assets that will need to be protected. If your spouse preceded you in death and you have minor children, the court system will determine who they will live with and who will manage their property because you didn’t outline that in your will. A judge will also decide who will administer your estate.
If you are a business owner, dying without a will can also throw a wrench in the works. For example, your minor children would end up owning a portion of the business leaving their court-appointed guardian acting as a partner on their behalf in the business. Your other business partners may not be happy with that scenario. [As an aside, if you are in business with non-family members, you may want to require all partners to have a will in place.]
As of the writing of this article, the courts were still holding out hope of finding Prince’s will. Disputes may still arise even if a will is discovered, but at least the courts will have an idea of Prince’s intentions and can come to more informed decisions. Keeping your will in a place where someone can access is almost as important as making a will in the first place.
The location of the will is not as critical, though, as whom it is that knows where to find it. Your executor may be a good choice for keeping the will or knowing its whereabouts. A safe in your own home seems an obvious choice, so long as someone you trust knows it’s there and has the combination or code to open the safe. I recommend to my clients that the attorney keep the original copy of the will, and they keep a copy that clearly indicates the location of the original. The will remains at the law firm where it was originally produced, whether or not the attorney is still there at the appointed time. Regardless, you will want to review this option carefully with your attorney first.
To protect your loved ones and make sure your assets are distributed per your wishes, preparing a will is imperative. You should also review your beneficiary designations on retirement accounts and insurance policies, as well as joint accounts to ensure that they are consistent with your wishes. You should also review your will every few years or when significant life changes have taken place – such as divorce and remarriage, birth of children or grandchildren, or retirement.
The situations that may take place as a result of not having a will or improper estate planning are far more numerous than the examples referenced above. There is no time like the present to plan the future of all that you have worked for and built. Take a lesson from these tragic celebrity deaths – don’t give others the opportunity to decide the fate of your estate.