Most Texans will never have the level of wealth that famous musicians have. So, when it comes to drafting estate planning documents, people who are of lesser means will frequently scoff at the idea that they can learn something from mistakes made by famous performers who died in the not-so-distant past such as Michael Jackson, Prince and Whitney Houston. However, the three artists - who died relatively young - did make mistakes that can provide guidance to people who are formulating their estate plan.
Mr. Jackson's death left his estate up in the air as to its total value and it is still in dispute in tax court. He left a will and there was said to be approximately $1 billion for his heirs. The brand of Michael Jackson was not valued as expected, coming to slightly more that $2,000. In contrast, the Internal Revenue Service stated it should have been worth around $434 million. That could mean an estate tax bill for $700 million. People who have unconventional assets should try to be sensible when assessing their value.
Prince had taken care of all taxes and his assets were adequately valued, but he did not have a will. Wills are important even for those who, like Prince, did not have children. He did have many relatives who claimed to be heirs. This led to massive legal costs. There was no qualified executor. People who do not have children should still make certain to have a will. Prince had accrued enough to pay estate taxes, but those who do not can face issues in such a circumstance.
Ms. Houston had a will and named her daughter Bobbi Kristina as the heir. There were contingent heirs as well. This might have been a simple case, but it has continued because the money was to be issued at intervals with certain rules regarding her daughter. Since Ms. Houston's daughter died at 22 and had no will, she had received 10 percent of the estate and the rest has been in dispute with Ms. Houston's ex-husband Bobby Brown seeking to inherit it.
These cases might seem foreign to most people who are considering how best to estate plan, but it is not that different. Making sure to consult with a legal professional experienced with estate planning for people of different walks of life can help to form a comprehensive plan and avoid the problems that have plagued the estates of those famous artists.
Source: Nasdaq.com, "Iconic Estate Flops: What Michael Jackson, Whitney Houston and Prince Did Wrong," Dec. 11, 2017