It’s October, the time of year when everyone loves to hear scary stories. In keeping with the tradition, I’m going to share several celebrity horror stories to show what happens when estate planning goes wrong. These celebrities, for whatever reason, did not create a will or trust before they died (or if they did, did it wrong) and serve as examples of the scary consequences that can cause nightmares for years:
Marilyn Monroe died with a will, but no trust. About half of her estate went to the IRS in estate taxes, and the rest slogged its way through probate court for 39 years. In addition, three-quarters of her estate went to a friend that died a few years after Marilyn, and his widow (who Marilyn had never met) proceeded to sell everything Marilyn had ever touched and monetized everything about Marilyn she could. It’s estimated that this woman made a good 30 to 40 million dollars from Marilyn’s estate – probably not the outcome Marilyn would have wanted (if you want to actually read Marilyn’s will, I have a copy available for download, with my comments, for my newsletter subscribers).
Elvis Presley had an even more impressive estate tax bill – 73% of his 10 million dollar estate went to the IRS after he died. That left his beneficiaries with 3 million dollars, but somehow his manager turned it into 1 million within two years. At that point, the probate court decided to investigate and found that the manager, in addition to being bad at his job, paid himself well in excess of normal fees. It wasn’t until the manager was fired that the Elvis Presley Estate managed to build momentum and become the empire that it is today.
Michael Jackson did a little better than Elvis and Marilyn since he created a will and a trust. However, he failed to actually put anything into his trust, so his estate still went into probate. His estate also had a long fight with the IRS over what Michael was worth at the time he died – rumor has it the IRS felt they were gypped on the Elvis Presley estate since they didn’t consider what his right of publicity was worth when they calculated his estate tax.
Everyone believed Aretha Franklin had no will or trust, and the probate was going very smoothly until multiple handwritten wills were discovered in her home. These wills set out unequal distributions between her sons, which started a big battle that caused the executor to resign just to get away from it all. This is a case where it might have actually been better to have done nothing.
And where to start with Prince? He had no will or trust, and his probate has been called by some media outlets “the most complicated probate in Minnesota history.” It took an entire year just to sort out who his heirs were since everyone and their child came forward claiming some kind of blood relationship. He also was a prolific composer, and his collection of recordings and written music was massive enough to justify renting an entire warehouse to store it all while someone identified and cataloged each piece (a process that I believe is still ongoing). This also means that everyone is still trying to figure out the value of the estate and what taxes are owed, and distributions to heirs can’t start until all debts are paid, so the heirs are seeing massive legal bills while they wait for a money train with no time of arrival. And now one of the heirs just died, and the heir’s estate is looking ripe for litigation, so the mess continues.
Celebrity horror stories are fun to read about, but not so fun to live through. If you want to make sure your loved ones don’t experience these kinds of headaches, please feel free to email me at email@example.com.