Mistakes are inevitable, but learn from others to secure your legacy for the future.
From no documents to outdated documents, simple mistakes can cause problems for your loved ones.
Here are a few “famous” examples:
No Estate Plan At All.
If you pass away with out a Last Will and Testament, the state will determine the distribution of your assets, and in some cases, will claim funds for itself (escheating to the State).
Prince passed away in 2016, and it was quickly determined he did not have estate planning documents. Therefore, a Minnesota judge was tasked with distributing his estate, estimated at a whopping $156 million, among his six siblings.
A federal inmate claimed to be the singer’s son and delayed the proceedings until it was found that was an inaccurate claim. As the remaining six beneficiaries could not agree, the proceedings were delayed.
It took over six years to settle his estate.
Lesson:
While we all do not have quite the estate to distribute, it is important to have the right estate planning documents to ensure a stranger does not determine your beneficiaries and your loved ones are not dealing with delays and litigation costs.
A simple Last Will and Testament would have helped avoid the six year battle described above.
Failing to Remove Beneficiaries during and after Life Events.
When Barry White died, he was separated but not yet divorced from his second wife. Unfortunately, he did not have an estate plan in place and therefore his current live in girlfriend and nine children received nothing after a long legal battle.
Lesson:
If you are in the process of a divorce, the law considers you to be legally married until a Judge executes a Final Judgment. While you may be limited in some udpates to your estate plan, you can change some documents such as a Last Will and Testament, power of attorney or healthcare surrogates.
Once you are divorced, be sure to update all necessary documents and beneficiaries.
>> RELATED READ :: After the Final Hearing – A New Reality
Failing to Add Beneficiaries after Life Events.
Heath Ledger died in 2001 at the young age of 28. He had executed a Last Will and Testament which left everything to his three sisters and his parents. Unfortunately, between the time of execution of his documents and his untimely death, Ledger had a daughter. While this case ended with the family giving all the money to his daughter, not all families are so cooperative.
Lesson:
Be sure to review your estate plan every several years to ensure there are not life-changing events that trigger the necessity to update your documents.
Hiding your Estate Planning Documents.
While you may have meticulously laid out the best estate plan, it is worthless if no one can find the original documents. While it was believed that Olympic athlete Florence Griffith-Joyner had executed a Last Will and Testament before her death in 1998, it was never located. Griffith-Joyner’s husband and her mother spent years in litigation that could have been easily avoided.
Lesson:
While most estate planning attorneys will keep a copy of the executed documents, it is imperative to safely guard the original documents, and ensure a trusted person is aware of the location (and has access).
Making verbal promises, that are never legally memorialized.
Actor Marlon Brando allegedly promised his housekeeper his homestead property, but Brando never memorialized this promise in writing and executed the writing under the laws of his state. The housekeeper later sued the estate, and it was settled after three years of litigation.
Princess Diana left a “letter of wishes” in which she gave a portion of her estate to her godchildren. However, it was not executed under the requirements of the law and dismissed by the executors.
Lesson:
Put your wishes in writing, under the laws of the state.
Failing to Fund a Trust.
Michael Jackson died in 2009 with a Trust in place. The only problem, he never transferred his assets into the Trust. A string of legal battles ensued over his $500 million estate. Therefore his entire estate transferred outside the Trust and was forced to go through probate which took years and numerous legal challenges.
Lesson:
Trusts are valuable estate planning tools, however to avoid probate you must transfer your assets to the Trust prior to your death.
These stories drive home a simple truth: mistakes happen, but we can learn from these examples to avoid unnecessary headaches.
By taking proactive steps to ensure our estate plans reflect our current circumstances and wishes, we can spare our loved ones from confusion, disputes, and lengthy legal battles down the road.
So, take a cue from these stories and make sure your legacy is protected by getting your affairs in order today!
Guest Contributor: Virginia Ralls
Virginia Ralls is a Pensacola native and an avid supporter of military members and their families. Virginia graduated from the University of Florida and then came home to pursue her Master’s Degree from the University of West Florida (Go Argos!). While working full time and obtaining her Masters full time, she met and fell in love with her husband, another Pensacolian, James Ralls, who was active duty Coast Guard. They married and moved to Philadelphia with his new orders. A dream became reality when Virginia was accepted into the Drexel University School of Law in Philadelphia, PA. Eventually, they found their way back to Pensacola, where their son Vincent was born.
Virginia now practices law with her father at Chase & Ralls, PLC, where she is the Director of Trusts and Estates. She uses her experience in law to help mothers and families navigate estate planning and probate. She believes Pensacola was a dream location to grow up, and she is now excited to grow her own family in this Western Gate to the Sunshine State.
