Lessons of Famously Bad Estate Planning

[Mark]

This is good and worth sharing from Insurancenewsnet

Lessons of Famously Bad
Estate Planning
Sure, celebrity screw-ups are a guilty pleasure, but they offer up some important financial lessons for our clients.

Click here to see it.

 

[Crabcake Johnny]

It's tough to watch it go south even when there is a will.

A very good friend of mine ended up taking care of his mother. The other kids (2 of them) cried "broke" and were always too busy to help.

The mother adjusted the will to give more money to my buddy (her son) who spent a great deal of money and time.

Didn't matter. The mother passed away about two years ago. Should have been a slam dunk but the other kids sued - claimed she was taken advantage of and that she was "forced" to change her will by the "greedy" son.

It's still in court - no one's seen a dime.

With another friend of mine nothing ended up in court but the kids don't talk to each other anymore over the estate's heirlooms - which were not spelled out in the will.

 

[scagnt83]

It's tough to watch it go south even when there is a will.

A very good friend of mine ended up taking care of his mother. The other kids (2 of them) cried "broke" and were always too busy to help.

The mother adjusted the will to give more money to my buddy (her son) who spent a great deal of money and time.

Didn't matter. The mother passed away about two years ago. Should have been a slam dunk but the other kids sued - claimed she was taken advantage of and that she was "forced" to change her will by the "greedy" son.

It's still in court - no one's seen a dime.

With another friend of mine nothing ended up in court but the kids don't talk to each other anymore over the estate's heirlooms - which were not spelled out in the will.

This is why just having a will is not always sufficient. Most wills out there can (and should) be improved. Trusts can help to take the guesswork out of things as well.

 

[xrac]

What is really bad is agents who run around with no or inadequate life insurance. The first policy I would write would be for myself.

 

[HarryRenard]

It's tough to watch it go south even when there is a will.

A very good friend of mine ended up taking care of his mother. The other kids (2 of them) cried "broke" and were always too busy to help.

The mother adjusted the will to give more money to my buddy (her son) who spent a great deal of money and time.

Didn't matter. The mother passed away about two years ago. Should have been a slam dunk but the other kids sued - claimed she was taken advantage of and that she was "forced" to change her will by the "greedy" son.

It's still in court - no one's seen a dime.

With another friend of mine nothing ended up in court but the kids don't talk to each other anymore over the estate's heirlooms - which were not spelled out in the will.

The above situations are not the exceptions they are the rule.
All wills MUST be probated, if there are any assets to probate is another story, hence the definition of probate -the process of proving a will.

That is why it is all about titling of assets and getting beneficiaries on all of our assets to take the asset out of the will and probate.
Probate leaves your estate open to the public and allows greed to set in.

I think the most important part of that article is that those people have endless resources and they still get terrible if any advice.

 

[Mark]

I guess we all expect rich people that can afford to pay someone to take care of these things to do them.

They didnt think they would die so soon. I bet they were all going to do it one day..

 

[Crabcake Johnny]

What amazes me is millionaire celebrities "going broke." Who advises that these people buy 2, 4, 10 homes AND hold a mortgage?

Nick Cage is having properties foreclosed on left and right? Huh? His financial experts advices that he actually carry an interest-bearing mortgage instead of living within his means and buying a house with cash?

Same with Ed McMahon. How is it possible he didn't owe his house at his age?

I read today the Kate Jackson is broke. He estimated new worth was 5.3M and her advisor apparently told her to buy a 2M house. What? Almost HALF of her entire net worth should be spent on a house with a mortgage?

 

[Freddie]

What amazes me is millionaire celebrities "going broke." Who advises that these people buy 2, 4, 10 homes AND hold a mortgage?

Nick Cage is having properties foreclosed on left and right? Huh? His financial experts advices that he actually carry an interest-bearing mortgage instead of living within his means and buying a house with cash?

Same with Ed McMahon. How is it possible he didn't owe his house at his age?

I read today the Kate Jackson is broke. He estimated new worth was 5.3M and her advisor apparently told her to buy a 2M house. What? Almost HALF of her entire net worth should be spent on a house with a mortgage?

I think a lot of people in entertainment in Hollywood made money in real estate from 1920s to 1990s. In between there were a few slow downs but not like now. The taxes are insane and people are fleeing as the quality of life keeps dropping.

Nick Cage? Probably to reduce taxes but he spends to much though the income is probably still okay or not terrible.

The other two probably had income dry up and this was a buy and sell for a double on property appreciation. Housing prices tanked and they are screwed. Sad.

 

[Crabcake Johnny]

I can't imagine most of those million dollar homes play out well. They don't seem to hold their value too well, are a nightmare to sell and utility costs, maintenance and property taxes have to chew up a lot of money.

There has to be other options for the ultra rich to reduce their tax liability then buying a 10 million dollar albatross.