You don't need to be rich and famous to need an effective Estate Plan. And all the money and fame in the world doesn’t always mean folks get the best estate-planning advice.
Create an Estate Plan.
Musician Prince never did, and because of that, even a prison inmate popped up to claim he deserved a share of Prince’s estate, worth hundreds of millions of dollars. The court battle drags on, five years after Prince’s sudden death.
Billionaire Howard Hughes died without a will. Somebody found one later, but it was proved to be a fake. A court battle ensued. It took around 34 years to straighten out what should be done with his $1.5 billion.
Singer Aretha Franklin died without a will. Once again – are you seeing a theme here? – her $80 million estate ended up in court.
Keep your Estate-Planning documents in a safe and obvious place.
Olympian athlete Florence Griffith Joyner may have had a will – somewhere – but nobody could find it. The matter ended up in court, once again, for years. The issue was whether Joyner intended her mother to live, rent-free, in the Joyners’ home.
If you’re getting a divorce, don’t delay your planning.
Despite that singer, Barry White and his second wife were in the process of separating at the time of his death, she ended up with his entire estate. His children from other marriages, and his live-in girlfriend at the time, all sued. The law says that until a divorce decree is signed, you are still married, and if you pass before that and your estate plan includes your soon-to-be ex, that person will get your property.
Don’t try this at home.
Actor Philip Seymour Hoffman didn’t like the idea of his children becoming “trust-fund kids,” so he left everything to the mother of his children, to whom he was, unfortunately, not married. The result was a tax bill of millions of dollars. This could have been avoided if he had consulted an attorney with estate-planning expertise.
Don’t try this at home 2.0.
Supreme Court Justice Warren Burger typed up his own short will to dispose of his $1.8 million estate. He may have known Constitutional law, but not estate planning. His family paid a huge chunk of his riches in estate taxes that, once again, could have been avoided if Justice Berger had planned correctly.
If big changes happen in your life, let us know right away.
Actor Heath Ledger’s outdated will left everything to his parents and sisters, but after that will was written, he had a daughter with his girlfriend. It was only by the grace of Ledger’s family that they gave the girlfriend and daughter some of Ledger’s money. Don’t rely on your family to have to make those decisions for you.
Put promises in writing.
Marlon Brando’s housekeeper claimed he had promised that she would get his house when he died, but he hadn't put that in writing. She sued. Three years after Brando’s death, his estate settled with her for $125,000.00.
These are cautionary tales...and while your private affairs won’t necessarily end up in the newspapers...effective planning, with an Estate Planning attorney WILL prevent unnecessary expenses and legal entanglements down the road. We’d be happy to chat with you about a plan that will work for you and get the process started.
Splitting up assets during a divorce can be trying. Deciding who gets what and if it is kept intact or sold and split up can result in a headache and a lot of hurt feelings. This stress is compounded when there is debt. It can be difficult to split up debt when a relationship ends. Most debt is assumed under both members of the couple names, as it is easier at the time. When a split happens, this becomes tricky. Who is responsible for the mortgage? Are the car or cars going to be paid off by one individual? Are both of you responsible for the family loan from dad? Hopefully, divorce ends as amicably as possible, but debt can complicate this, so here are some tips for making things go as smoothly as possible while separating with debt.
Keep the Status Quo
When you decide to separate you should keep the status quo as much as possible until you go to court. Joint debts need to be paid as they usually are, and unless you agree with your spouse to up payments on these debts, then just keep paying them off as you usually would. Keep spending to a minimum, as much as possible, and do not make excessive spending decisions on joint credit cards or lines of credit. If you spend irresonsibly after you have decided to separate then a judge can take that into consideration when splitting up finances and debts. Keep the status quo.
If you have joint debts, then you are both equally responsible for paying the debt back. That does not mean that you cannot be pursued by creditors, however, if your ex-spouse does not pay their portion. To try to mitigate this, you can contact banks and creditors that you will be separating from your spouse and that you are not liable for any spending your spouse makes moving forward. This can help protect you from future debts, but you need to understand you may be pursued for current debts owed by you and your spouse jointly.
Debt in Your Name
If you have debt that is not joint, then your spouse is not liable for payment of the debt, even if you used the credit to purchase things that your spouse uses, like their wardrobe. If you let your spouse use your credit card for spendings, such as groceries or gas, then you are also still responsible for it, as this is under your name. On the same hand, you are not responsible for their debt unless you have guaranteed it.
All assets and debt are included in calculations for the net family property when equalization occurs. Debt that you hold in your name is your sole responsibility, but debt that you hold together is split equally between both of you. If you receive more property, though, such as the family home, then more debt may be given to you to equalize things.
Discuss debt early on with your spouse when you are going through a separation, and if things are too heated to discuss debt and assets properly then contact a lawyer immediately so that they can act as a mediator between you both. Separation is never easy, but with the right team on your side it can go as smooth as possible.