Most North Carolina residents do not have as much money as late celebrities like Prince, Whitney Houston or Heath Ledger. However, everyone can take a lesson from the estate planning mistakes that these stars have made. While celebrity estate planning mistakes can lead to multi-million dollar losses, they are still the same kinds of mistakes that non-celebrities make on a smaller scale.
Before Prince died, he made the most common estate planning mistake. Prince neglected to make any estate plan, so his assets were divided between his five surviving siblings based on intestacy laws. With no estate plan, Prince also inadvertently left a considerable amount of money to the U.S. government, attorneys and banks. The lesson everyone can learn from Prince’s mistake is that any estate plan, even a very simple one, is better than no estate plan.
Whitney Houston created a will and trust shortly before her daughter was born and then never updated it. After Houston died, her daughter Bobbi Kristina Brown was supposed to receive her mother’s assets incrementally. Bobbi Kristina was to be paid 10 percent of her mother’s fortune when she turned 21, but she died soon after her 21st birthday. The mistake that Houston made was failing to place her assets in a trust that could be updated to account for her heir’s ability to handle money. Heath Ledger made a mistake by writing a will before his daughter was born, but failing to provide for the possibility of future children.
Writing a will is usually the first step that people take when they begin to create their estate plan. While wills are vital to an estate plan, they cannot do all of the same things that trusts can do. An attorney may help an individual gain more control over how their assets are dispersed after their death by setting up a trust.