Celebrity Estate Planning Screw Ups: When Families Clash
Estate planning is a pillar of the financial planning process. If you have saved and invested well, you may want to leave a legacy behind to your friends, family, and the causes that you’re passionate about. You have worked hard for your fortune; it deserves to be placed in the appropriate hands.
Unfortunately, elderly fraud is on the rise. According to an AARP study, 72% of people 50 or older have been a target of financial fraud. The elderly are the prime target for criminals. The transition and movement of money make them more appealing to fraudsters.
So, how do you protect your estate when there are people lurking behind every corner trying to access your funds?
Be Careful Who You Select to be Your Power of Attorney
Astronaut Edwin “Buzz” Aldrin followed Neil Armstrong on to the moon in 1969. However, at age 88, he finds himself entangled in a legal battle with his two children and former business manager. Buzz had created a revocable trust naming his son Andrew Aldrin as the successor trustee. However, that didn’t seem to be good enough for Andrew.
According to court documents, Andrew and Janice Aldrin were working with Buzz’s former business manager, Christina Korp, to strip Buzz of his estate. They petitioned that Buzz was unable to manage his own affairs due to the state of his mental health.
Andrew and a former business manager have also been accused of refusing to allow Buzz to remarry, as well as transferring hundreds of thousands of dollars to other accounts as “business expenses”. He should have thought twice about who he trusted with handling his affairs.
Your family may not try to manipulate you in a similar manner, but you do need to think carefully about who you choose to name your successor, trustee, or Power of Attorney. Before you sign the documentation, be sure you fully trust the person you are leaving your estate to. If your son has been known to rack up credit card debt, he may not be the first person you should select, as he may not have the purest of intentions.
Think long and hard before moving forward with any decision.
Another example of a toxic inner circle was Stan Lee, co-creator of Spider-Man; the X-Men; Black Panther; the Fantastic Four; and the Hulk, having an estate of over $50 million. Everyone from his family members to his business associates were said to have tried and taken advantage of his living estate.
His daughter was known to rack up $20,000- $40,000 a month in credit card debt. She tried to manipulate and demand adjustments to the trust in her name. Mr. Lee should have been more careful in creating the disputations for the distribution of fund from each trust.
Explore a Revocable Trust
The focus is often the distribution of fund once someone passes away. However, there should be more emphasis on planning for the aging generation. This is where trusts come into play.
A revocable trust can create a vehicle that avoids that portion of your estate going to probate with the courts. By establishing a revocable trust, you can create terms and conditions for the retrieval of your assets. This will also keep your documents private. Take it from Michael Jackson; asset distribution can get complicated. The more specific you can be, the better.
Lastly, you can create trusts and elect trustees and executors who are not related to you, and therefore may have your best interest at heart, as opposed to family. Sometimes money is a larger evil than the loss of the family member, and by electing a third party, you may be able to take the stress away from the family and out of their control.
The bottom line
It’s important to work with a financial professional you can trust and who understands your priorities. Focus on the details. Don’t leave anything out. If you don’t feel good about leaving part of your estate or responsibilities to a loved one, don’t. This is your fortune. You should decide where it goes. After all, you have worked your entire life to create it.
Michael launched Your Money Geek to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.