Let’s take a look at five celebrities and learn from their estate planning mistakes

Howard Hughes

(d. 1976) – No Estate Plan
Howard Hughes passed away with a net worth of $2.5 billion but his estate was not completely settled until 2010. Hughes left no instructions, no will, and no trust. Most of his $2.5 billion went to the Howard Hughes’ Medical Institute, a few relatives, and to the attorneys working on the case. Many claimed to have the last will and testament but they all were deemed to be fake.
 
What to learn:
 
The vast majority of individuals will not pass away with such a large amount in their estate. Many individuals will pass away with large assets such as cars, houses, investments, and other assets that they would like to pass on to family. Setting up a trust will help avoid the costly probate process and make sure your family is taken care of in a smooth transition of your assets.
 

Philip Seymour Hoffman

(d. 2014) – Paid Extra Estate Taxes
Hoffman died, at the height of his career, without legally marrying his life partner. Since the two were not legally married, the estate (valued at $35 million) was set to give Ms. O’Donnell $20 million but was forced to pay $15 million in estate taxes.
 
What to learn:
 
Married couples can receive unlimited tax-free gifts from their spouse. Other family members do not enjoy those same distinctions. Creating a living trust is the best way to ensure that gifts to family members do not have to go through the probate process, and the estate will save a lot of time and money.
 

James Brown

(d. 2006) – Estate Planning Mistakes
James Brown, the music legend, passed away with an estate value between $50-$100 million. James had an estate plan written and ready; however, he did not inform his relatives who were quite surprised to know that he gave most of his assets to a charitable trust that provided scholarships to children in South Carolina. Brown’s estate has been tied up in legal battles that have not been settled even 10 years after his death. Brown also created his plan later in life which made not informing his relatives even worse.
 
What we can learn:
 

1. Protect your assets before the age of 65

 
If an individual creates an estate plan after 65 the plan made is much more likely to be disputed in court. Because individuals older than 65 are susceptible to elder abuse, arguments can be made that decisions made at that time period are because the individual is being controlled and not in the right state of mind.

       2. Talk to your heirs

Family members need to be informed if they are not going to be included in the will or trust. If they are not informed it is more likely that a legal battle will ensue. Having at least a working relationship with your heirs is important if you wish to ensure a smooth transition