You Don’t Have to Be Famous to Need a Will!
All a celebrity has to do is die without a will and the details of their lives are all over the news. There’s a fascination with seeing how those who have achieved a high degree of success, fortune and fame create an epic fail, when it comes to planning for their demise.
We can’t all be Prince. But you still need a will, especially if you own a home, assets and have a family. As reported in New Haven (CT) Register’s article, “Even celebrities fail at estate planning,” you definitely need to have your estate planning done properly, if you live in Connecticut or other states that have a state estate tax with a lower exemption than the federal rate. Otherwise, your heirs may find themselves scrambling to figure out how to pay their tax bill.
There are 14 states and Washington, D.C. that impose an estate tax that’s separate from the federal estate tax. The federal “death tax” is an astronomical 40%, but applies only to assets above the federal exemption of $5.49 million (2017). For example, in Connecticut, the state starts imposing its estate tax on assets exceeding $2 million.
You’d think that celebrities who have considerable wealth would make certain to include estate planning, in their personal finance plan. They can easily afford to engage a team of attorneys and advisers. But many fail to do so. This only shows how common it is for high net worth individuals to neglect estate planning.
- Prince: The musician died in April 2016 at the age of 57, but he didn’t prepare a will. A judge will decide how to distribute the $300 million estate.
- Heath Ledger: The actor who died unexpectedly in 2008 at age 28 left a will—but he didn’t update it when his daughter was born in 2005. This caused confusion over heirs and possible legal battles, but Ledger’s family did gift the entire estate to his daughter.
- Warren Burger: You would think the former chief justice of the U.S. Supreme Court would know how to take care of his legal obligations. But when he died in 1995, he left behind a one-page will that he typed himself. That document was poorly worded and left his family susceptible to a $450,000 estate tax bill and court fees that wouldn’t have been imposed, if had he had hired an estate planning attorney to create a trust.
Depending on your asset level and the complexity of your family life, estate planning can be simple or complicated. Regardless of which category you fall into, you’ll want to work with an experienced estate planning attorney to address taxes, distribute assets and ensure that your wishes are carried out. Maybe your passing won’t make headlines around the globe—but you still want to plan for those you leave behind.
Reference: New Haven (CT) Register (June 24, 2017) “Even celebrities fail at estate planning.”