Unfortunately, people can make plenty of mistakes when putting together their estate plan. The consequences of failing to make good plans can have dire consequences for family members, and can cause valuable assets to be wasted. Six common estate planning mistakes include:
Waiting to make plans until it is too late.
Failing to work with a professional team.
Forgetting to make plans for the family business and failing to manage estate taxes.
Letting documents get out of date.
Failing to make proper plans for young children.
Forgetting to plan for the possibility of incapacity.
Plenty of famous people have made these estate planning mistakes. Their stories are reminders about the importance of planning.
Peter the Great of Russia – Waited to make plans until it was too late
Peter was preparing to name his successor as tsar when he died. His wishes were never known. Howard Hughes and Sonny Bono also died without leaving clear written instructions for their family members.
Doris Duke – Failure to work with a professional team
Doris died a billionaire heiress, but named her butler as the executor of her estate. Those who stood in line to benefit from Doris’ fortune spent years trying to get him removed from that position of responsibility.
Joe Robbie – Forgot to make plans for the family business and to manage estate taxes
During Joe’s lifetime, he was controlling owner of the Miami Dolphins football franchise, as well as the stadium at which they played. After his death, family squabbles helped to fracture the business, and estate tax issues forced the sale of the franchise and stadium.
Anna Nicole Smith – Let documents get out of date
Smith had prepared a will naming her son the sole beneficiary of her estate, and specifically excluded all others. At the time of Anna’s death, her son had tragically predeceased her, and Smith had made no new plans for her young daughter. Likewise, Heath Ledger’s will left his estate to his parents and siblings, but had no provision for his young daughter.
Kurt Cobain – Failure to make proper plans for young children
At Kurt’s death, he left no will. His daughter Frances’ inheritance came under the control of Courtney Love and another trustee. The family and trustees are still squabbling over control of that trust.
Bettie Page – Forgot to plan for the possibility of incapacitation
Bettie was a classic American pinup model from the 1950’s. Fifty years later, she was being treated in California state hospitals for a debilitating illness. Her attorney received permission to act as conservator of Page’s estate. A judge later ruled that the attorney had failed to use the money under his control for Page’s benefit, and ordered him to pay back $145,000.
All of these situations could have been helped with proper estate planning. Estate planning involves creating needed legal documents, such as wills, trusts and powers of attorney. It also involves making sure asset titling and beneficiary designations are consistent with the overall distribution strategy.
Are you worried about your own estate plan? We would be happy to review your situation. Please call the office at (630) 443-8575 to set up an appointment.