Anticipating Disputes and Avoiding Common Planning Errors

Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” It is a great quote with incredibly deep meaning: how much can you endure in the face of adversity? Knowing that hard times are bound to come doesn’t mean you ought to just “wing it,” as doing so is going to leave you in an even worse position.

Planning brings you confidence, clarity, and, most importantly, control. Good intentions uncoupled from sound counsel and timely execution can and will lead to disaster. Whether famous, infamous or somewhere in the middle, everyone faces this reality, and not least of which in the realm of estate planning. Let’s look at some more famous cases of individuals whose estate was left in a less than optimal position:

George Washington: Was one of our wealthiest Presidents and a DIY-er when it came to estate planning. He wrote two wills, one including six months before his passing and the estate took nearly 50 years before it was closed. The primary lesson here is don’t fail to consult with competent counsel on important matters like estate planning.

Abraham Lincoln: At the time of his assassination, President Lincoln had an estate valued at roughly $110,000. He died intestate, meaning he died without a will, thereby leaving the distribution of his estate up the provisions of state statute, regardless of what he would have wanted. Rather than the entirety of his estate going to Martha, it was split between her and Lincoln’s two then-living sons.

James Dean: Like Lincoln, Dean died without a will and without any descendants. Dying without a will here meant his estate went to his father, who abandoned Dean when he was nine years old.

Terri Shiavo: The most private of these individuals on the list, Terri suffered cardiac arrest in 1990. Though resuscitated, she was without oxygen for enough time to render her completely brain dead. Nearly 15 years of court battles between her spouse and parents, and 14 court appeals later, including involvement by the United States House of Representatives, her matter became public. Had Ms. Shiavo executed a Living Will prior to 1990, all of the family strife and public spectacle could have been avoided.

Anna Nicole Smith: 2001 Will provided for only one child and specifically stated all other children would be disinherited. Ms. Smith never updated her will after the birth of her daughter and son’s death (which were three days apart). As a result, her estate went to Ms. Smith’s heirs at law, rather than her daughter.

Michael Jackson: He had a rather good estate plan in place, which included a revocable living trust. Trouble is the trust was never funded during his lifetime. The trust is designed to avoid probate and potential litigation, neither of which occurred because the trust was never funded.

Prince: Another famous case of someone dying without a Will, but Prince’s estate was valued at approximately $300M. Not having a will in place meant fiduciaries had to be appointed and beneficiaries chosen by the court. The Fiduciary appointed by the court was approved to receive monthly compensation in the amount of $125,000.

These are common things no one thinks about until it is too late. As a result, using the above cases as a guide, please take stock of your circumstances to see how you can avoid these basic estate planning pitfalls.