Howard Hughes, worth billions at his death, did not have a properly executed Last Will and Testament. Though there were 30 purported Wills offered for probate, not one of these Wills was actually admitted to probate. As a result, state law determined how the wealth would be distributed, costing his estate hundreds of millions in state and federal estate taxes, which could have been avoided. Unfortunately, Howard Hughes’ beloved Howard Hughes Medical Institute was not a beneficiary of his estate, which could have allowed Hughe’s estate to pass estate tax free due to the unlimited charitable deduction that would have been available.
The late U.S. Supreme Court Chief Justice, Warren Burger, from the highest court in America, wrote his own Will in 176 words. As a result, his estate paid a few hundred thousand dollars in additional taxes and probate costs. Why? Chief Justice Burger was a brilliant attorney, but did not master estate planning 101.
Heath Ledger had a well drafted and properly executed Will. However, he forgot to update his Will after the birth of his daughter, Matilda. Fortunately, Heath’s parents have assured she will be taken care of and under the law she will become a pretermitted heir, which means that she will ultimately be a beneficiary of his estate. However, Heath wasn’t able to establish the terms surrounding Matilda’s receipt of the money. In addition, Matilda’s mother will most likely not be provided for since there are no legal provisions in place for unmarried partners.
Michael Jackson’s Will paid an unnecessary $100 mm in taxes due to poor structuring of his assets and drafting of his Will.
Bottom Line: A Will encapsulates your legacy. Cutting corners, not paying attention to the details, not reviewing it regularly and updating it when necessary, or doing it on the cheap may result in negative unintended consequences.
Always Asking, Never Assuming™
Christopher Holtby