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6 celebrity estate planning lessons from 2014

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We’ve lost some of the most beloved personalities in show business this year, from funnyman Robin Williams to husky-voiced starlet Lauren Bacall. Many celebrities who passed away this year left behind not only critically acclaimed careers, but also complex financial situations in need of rock-solid estate planning. Some had multiple children from multiple marriages to account for; others left family and friends with complicated legal battles. Some were in dire financial situations, or had debilitating diseases that required intricate end-of-life planning

Take a look at these six celebrities’ estate plans from 2014 and see who prepared well and who could have planned better to secure their final wishes for their fortunes and loved ones.

1. Philip Seymour Hoffman 

Age at death: 46 

Estimated value of estate: $35 million 

Estate plan lesson: If you’re not married to your life partner, leave the estate to your children in trust; update your will regularly. 

On February 2, Oscar-winning actor Philip Seymour Hoffman, who “The New York Times” called “perhaps the most ambitious and widely admired American actor of his generation,” died of a heroin overdose at the age of 46. 

Hoffman was survived by his longtime partner, Mimi O’Donnell, and their three children. By holding true to his principles about marriage and parenting, and by failing to update his documents, Hoffman subjected his estate to significant and unnecessary tax hits. 

It has been widely reported that Hoffman rejected the advice of his attorney and accountant who on many occasions advised him to create a trust. Hofmann stood firm, saying he didn’t want his three children to be “trust fund kids.” He also never married the mother of his children, O’Donnell, as he didn’t believe in marriage. 

Hoffman’s estate, which he left to O’Donnell, was reportedly worth $35 million. Because the two weren’t married, the entire sum was taxable at a rate up to 40 percent for the assets over the $5.34 million federal estate-tax exemption, as well as up to 16 percent in New York state taxes — a total of up to $15 million in estate taxes. To add insult to injury, when O’Donnell passes away, the assets will be taxed again if the amount still exceeds the estate tax threshold. Double taxation could have been avoided if Hoffman had been legally married to O’Donnell or left the estate to his children in trust. 

Another oversight in Hoffman’s estate plan was that he never updated his will to include his two younger children, who were born after the first will was signed. Since the document mentions their son but does not directly mention their two daughters, O’Donnell might have to include more provisions to make sure all children are treated equally. 

[Sources: CNN; Daily Finance] 

Up next: Mickey Rooney

2. Mickey Rooney 

Age at death: 93 

Estimated value of estate: $18,000 

Estate plan lesson: Estate battles and financial exploitation of seniors aren’t unique to cases involving millions of dollars. 

On April 6, actor Mickey Rooney died of natural causes at the age of 93, after an almost 90-year career in film, television, Broadway, radio and vaudeville. Rooney left behind eight children from multiple marriages, as well as grandchildren, an estranged wife, and two stepsons. 

Although his career spanned over eight decades, Rooney’s estate was valued at only $18,000 when he died. Family members allegedly exploited him financially in the years preceding his death. In 2011, Rooney sued his stepson Christopher Aber and Aber’s wife for financial exploitation. Aber agreed to a $2.8 million settlement but has not had the financial means to pay it. Rooney gave a testimony about his victimization in front the Senate Special Committee on Aging, saying, “I felt trapped, scared, used and frustrated.” Because of this alleged abuse, a judge granted attorney Michael Augustine conservatorship over Rooney and his estate, and issued a restraining order on Christopher Aber. Aber’s mother and Rooney’s wife, Jan Chamberlin Rooney, supported her son in the dispute.

Jan and Mickey Rooney separated shortly thereafter, in 2012, after 34 years of marriage. Jan signed an agreement waiving all claims to her husband’s estate. Two years later, just weeks before his death, Rooney — whom Augustine deemed physically and mentally competent — disinherited all his children from his will, stating that he had no ill feelings towards his children but that they all had established financial situations and did not need the little money remaining in his estate. Rooney named Augustine as the executor of his will, and named his stepson Mark, Christopher Aber’s estranged brother, who had been Rooney’s caretaker and with whom Rooney lived for the last two years of his life, as the sole beneficiary of his estate. 

Just five days after Rooney’s death, Jan disputed the validity of Rooney’s will. Her attorney, Eugene Belous, is cited as saying the will contains “a blatant misstatement” about the agreements she and her late husband made. “There is no provision in either of the two settlement agreements … that terminates or in any way affects her rights as surviving spouse,” Belous said. Jan, along with her son Christopher, demanded that Rooney be buried in a family plot, but after separating from his wife, Rooney had expressed his wishes to be buried alongside other Hollywood stars. The family reached a settlement, allowing Augustine to have Rooney buried in the Hollywood Forever Cemetery.

Rooney’s story highlights that estate battles — as well as the exploitation of seniors — aren’t unique to cases involving millions of dollars. And given that Rooney had been married eight times, had children from different marriages, and had multiple estranged family members, it is fortunate that he kept his will up-to-date in the years before he passed away. 

[Sources: CNN; USA Today; Reuters] 

Up next: Casey Kasem

3. Casey Kasem 

Age at death: 82 

Estimated value of estate: $80 million 

Estate plan lesson: Include advanced medical directives and appoint someone to make medical decisions on your behalf. 

On June 15, famed radio personality Casey Kasem died at the age of 82 from complications of dementia. Kasem was best known for hosting the music countdown “America’s Top 40” and providing the voice of “Shaggy” from the Scooby-Doo franchise. 

Kasem’s official cause of death was sepsis caused by an ulcerated bedsore after being hospitalized for two weeks. In his last days, a family dispute erupted over the continuation of his medical intervention, but Kasem had an advanced medical directive in his end-of-life plan that quieted the confusion. 

In 2013, Kasem was diagnosed with Lewy body dementia, in addition to a Parkinson’s disease diagnosis in 2007. As his health worsened, Kasem’s wife, actress Jean Thompson Kasem, prevented Kasem’s three children from a previous marriage from any contact with her husband. Three months later, Mike, Julie and Kerri Kasem petitioned for conservatorship over their father’s care but were denied. 

In May 2014, Kerri Kasem was granted temporary conservatorship over her father, who was taken out of a Santa Monica, Calif.-nursing home by his wife Jean. Shortly thereafter, Jean told the court that Casey was “no longer in the United States,” leading to an investigation of his whereabouts. He was found bedridden in Washington state, in critical condition and without food, water or medication. Judge Daniel S. Murphy ordered the continued feeding and hydration of Kasem, but Kerri Kasem’s lawyer noted that Casey was removed from artificial sustenance because he had signed an advanced medical directive in 2007, which had appointed Kerri, and not his wife Jean, to make his end-of-life decisions. The document stated that Casey would not want to be kept alive if it “would result in a mere biological existence, devoid of cognitive function, with no reasonable hope for normal functioning.” 

In June 2014, Judge Murphy reversed his decision to continue feeding and hydration. In a public statement, Kerri Kasem said that the court’s decision “upheld our father’s explicit wishes as expressed by him in his health directive.” 

[Sources: CNN; Forbes; Los Angeles Times; Reuters] 

Up next: Robin Williams

4. Robin Williams 

Age at death: 63 

Estimated value of estate: $50 million 

Estate plan lesson: Revocable trusts can help keep estate planning details out of the public eye. 

On August 11, authorities found Oscar-winning actor and comedian Robin Williams dead after he committed suicide at the age of 63. He first gained popularity starring in the TV series “Mork & Mindy” before establishing a successful career in stand-up, voice acting, and feature film. 

Williams was survived by his third wife, Susan Schneider, and three children from his previous marriages. Despite his penchant for comedy, Williams’ seemed to be quite serious about his estate planning. 

Williams owned a 640-acre working farm in Napa Valley named Villa Sorriso (Villa of Smiles), which he put on the market for $29.9 million in April 2014. He also owned a waterfront home in Tiburon, Calif., reportedly worth around $6 million. According to Forbes, as of 2011, the two properties’ mortgages totaled $7.25 million, with real estate equity of around $25 million (depending on Villa Sorriso’s selling price). 

In an interview with “Parade Magazine” in 2013, Williams said his reason for returning to television to star in CBS’s “The Crazy Ones” was in part due to financial issues: “The idea of having a steady job is appealing. I have two [other] choices: go on the road doing stand-up, or do small, independent movies working almost for scale [minimum union pay]. The movies are good, but a lot of times they don’t even have distribution. There are bills to pay. My life has downsized, in a good way. I’m selling the ranch up in Napa. I just can’t afford it anymore.” 

In the same interview, when asked whether he lost all his money in his previous divorces, Williams said he had “lost enough. Divorce is expensive. I used to joke they were going to call it ‘all the money,’ but they changed it to ‘alimony.’ It’s ripping your heart out through your wallet.” 

However, Mara Buxbaum, Williams’ publicist, has said that the actor was not struggling with financial issues and that any reports suggesting so are “simply false.” In 2012, Williams was reportedly worth $130 million. According to ABC News, his movies have grossed over $6 billion, and he was banking $165,000 per episode of The Crazy Ones before it was canceled in 2014 after one season. 

His estate planning documents include at least two different trusts. His two homes are held in the “Domus Dulcis Holding Trust” [translates to “Home Sweet Home”], and Williams named accountant Joel Faden and Hollywood producer Stephen Tenenbaum as trustees. There were also reports of another trust created in 2009 during Williams’ divorce from his second wife, but the document in question appears to be motivated by his divorce rather than his estate planning. Regardless, Williams seems to have employed at least one revocable trust in his estate plan instead of relying on a will as his primary estate planning document, likely to avoid tax complications and public scrutiny. 

Because of the privacy ensured by the revocable trust, the public will likely never know all the details of Williams’ distribution of assets. 

[Sources: Daily Finance; CNBC; ABC News; TMZ] 

Up next: Lauren Bacall

5. Lauren Bacall 

Age at death: 89 

Estimated value of estate: $26.6 million 

Estate plan lesson: Consider providing for the care of beloved pets and staff. 

On August 12, award-winning actress Lauren Bacall died of a stroke at the age of 89. She was known for her work in the film noir genre, most notably her first role in “To Have and Have Not” alongside Humphrey Bogart, whom she would go on to marry and co-star with in multiple films. Upon her death, she left much of her fortune to her children from different marriages, gave generously to her staff, and provided for the care of her pet. 

Bacall married Humphrey Bogart in 1945, and they had two children, Stephen Humphrey Bogart and Leslie Bogart, before he passed away from esophageal cancer in 1957. After an affair with Frank Sinatra, Bacall went on to marry Jason Robards in 1961 and had her third child, Sam Robards. 

At the time of her death, Bacall had an esteemed art collection and a $9 million apartment on New York’s Upper West Side. Her plan seems to have been well-executed, as her $26.6 million estate will be split evenly among all three children. Her two grandsons were each gifted $250,000. 

In addition to her family, Bacall wished to provide for her beloved dog and her longtime staffers. The first item on her will left $10,000 to Sam Robards to care for her spaniel, Sophie. Bacall also gifted $15,000 to Isla Hernandez, who served as Bacall’s maid for 14 years, and $20,000 to Maria Santos, who also served on her staff. 

[Sources: MarketWatch; DailyMail.Co.Uk] 

Up next: Joan Rivers

6. Joan Rivers 

Age at death: 81 

Estimated value of estate: $150 million 

Estate plan lesson: When the estate is worth over $5,340,000, consider transferring assets to an irrevocable trust to avoid extraneous taxation. 

On September 4, comedian Joan Rivers died due to complications from surgery at the age of 81. Rivers got her start as a guest on “The Tonight Show with Johnny Carson,” and was best known for her honest, self-deprecating stand-up comedy and red carpet interviews. Rivers’ financial preparation highlights three important components to any estate plan: end-of-life directives, pet care arrangements, and estate tax considerations. 

On August 28, Rivers stopped breathing during a routine endoscopy procedure and was put on life support in a medically induced coma. A week later, Rivers’ daughter Melissa made the decision to take her mother off of life support without a guardianship proceeding. Since family members cannot automatically decide to stop medical intervention without a form from the state or a document prepared by an estate planning attorney, it has been speculated that a medical directive Rivers had in place enabled Melissa to make this decision without court intervention. 

Since most of Rivers’ estate plan was prepared in a trust, the details of her arrangements are not required to be made public. However, with the same candor used in her comedy routines, Rivers publicly acknowledged on more than one occasion that the bulk of her estate was to go to her only daughter Melissa and grandson Cooper. In her book “I Hate Everyone… Starting with Me,” Rivers touched upon her end-of-life wishes: “When I die (and yes, Melissa, that day will come; and yes, Melissa, everything’s in your name) I want my funeral to be a huge show biz affair with lights, cameras, action.” 

She also made arrangements for her furry loved ones, naming a trustee and caretaker for her four dogs, a provision many pet owners overlook in their estate plans. 

In a 2010 interview with the “Washington Times,” when asked what her thoughts were on the Obama administration’s economic policies, Rivers sarcastically replied, “I can’t wait until he decides to tax me some more on my deathbed. I’m really thrilled about that. That’s called double taxation.” 

For those who die in 2014, the exemption is $5,340,000, so a gross estate plus adjusted taxable gifts over that amount is subject to the federal estate tax. According to Daily Finance, Rivers’ estate is estimated at $150 million, including a $35 million apartment in Manhattan, as well as property in California and Connecticut. If her plan was set up in a revocable trust, her estate would be subject to federal estate tax. However, if her assets were transferred to an irrevocable trust, she would not be the owner of those assets and therefore, her estate would not be subject to estate taxes. Given her attitude toward taxes, one would hope she had an irrevocable trust. 

[Sources: Forbes; Daily Finance; The Guardian Liberty Voice of Las Vegas] 

See also: 

Test your knowledge: celebrity estate mistakes [infographic]

6 tragic celebrity estate plans

3 celebrity estate lessons


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