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Estate Dramas: Even Celebrities Crave Clarity
In estate planning, there is no such thing as too clear. Whether you have an entire team of advisors to manage a net worth with many zeroes or you're working with your attorney to create a basic will, clarity counts.
Here are three celebrities who learned this lesson the hard way.
Estate Spat Resolved "At Last"
The title of one of Etta James' most celebrated songs also describes the estate planning feud between James' husband and her children. When James signed a power of attorney naming her son, Donto James, as her medical and financial decision maker, Etta's husband, Artis Mills, was less than thrilled. When her health took a turn for the worse, Mills filed to gain access to her financial accounts to help pay for her care.
Mills said his wife's judgment was already clouded by dementia when she signed the power of attorney, and her sons countered that their mother had reasons for keeping her financial accounts solely in her name even after four decades of marriage. The drawn-out and expensive legal battle ended just before James' death in early 2012, with her husband named as her guardian and awarded a lump sum to pay for his wife's medical care.
A Hard Road for Easy Rider
Dennis Hopper was notoriously bold in films. He was also bold in love, but instead of blockbuster success, he ended up with a slew of ex-wives. Hopper filed for divorce from his fifth wife, Victoria Duffy, in 2008. The divorce quickly turned ugly, and as Hopper's health declined, things only got uglier.
After Hopper died in 2010, Duffy faced off against Hopper's children and designated trustees. A prenuptial agreement stated that if the couple divorced or were no longer living together at the time of death, Duffy would not inherit. Duffy tried to convince the court that separate houses on the same property constituted "living together," but the court disagreed, so Duffy switched course, suing for defamation. Hopper's trust sued back, claiming that Duffy had stolen art and other valuable assets from Hopper when he was gravely ill.
At last report, the battle waged on, with no resolution in sight. The prenuptial agreement was smart planning, but lack of communication between Hopper's fifth wife and his children (all from other wives) has turned a nasty divorce into an even nastier estate battle.
Houston, We Have a Problem
Whitney Houston had done her estate planning homework. When she died in February 2012, she left behind an up-to-date will and a prudently planned trust for her daughter, Bobbi Kristina Brown, who inherited Houston's entire estate.
But just before she died, Houston was involved in a dispute around her father's estate. Many years ago, Houston loaned her father, John Houston, money to buy a house. Around the same time, John bought a life insurance policy for himself and named Whitney as the beneficiary. But when John died in 2003, his wife, Barbara Houston, claimed that the million-dollar policy was to be used to pay back the original loan from Whitney.
Whitney refused to credit the life insurance money to the loan, saying that was never her father's intent. Her stepmother sued for the life insurance money, saying John had told her that the policy was repayment for the loan. Whitney countersued, arguing the policy and the loan were unrelated. In the end, Whitney won the suit because there was no written document stating John's intentions for the life insurance policy.
These celebrity stories show that simply having an estate plan in place is not enough. A will is a complex legal document that can be interpreted in a number of ways. And if things get nasty after you're gone, one person's creative interpretations can cause years of expensive headaches for your heirs.
A will is a must-have, but you might also consider adding these documents to your estate plan to further clarify your intentions:
After your family is taken care of, we hope you will consider including Excelsior College in your plans. We're happy to answer any estate planning questions you might have; please feel free to contact Marcy Stryker at 518-608-8287 or email@example.com.
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.