In 2016, several well-known families had well-publicized fights about estates. These disputes should teach everyone to take action and be aware of their estate plan while they have mental capacity!
Prince
Pop artist Prince died in April 2016 without a Will. Since his death, at least 30 individuals have come forward claiming to be Prince’s children, spouses, or half-siblings. As of this writing, the judge on the case dismissed most of these claims. It looks like the estate, valued in the hundreds of millions of dollars, will be split amongst Prince’s younger sister and five half-siblings (pending the final results of genetic testing).
Lesson learned: Everyone should do a basic estate plan. And when large assets and unusual family structures are involved, do more than the basics.
Frank Sinatra Jr.
Frank Sinatra Jr. (the son of the famous singer Frank Sinatra) passed away in March 2016. At the time of his death, he was in litigation with his ex-wife regarding the status of his marriage. The two were divorced in 2001, but continued to live together, purchased a house together and appeared at social functions together. Cynthia, the disputing individual, claimed that despite the official divorce, the couple’s subsequent actions amounted to common law marriage and, as a result, she had a claim to his property and income. After pouring over specific facts, the appellate court denied her claim under a Texas law.
Lesson learned: The majority of states in United States do not recognize a common law marriage. However, in those states that do, one must be extremely careful with one’s words and actions, unless you want to share your assets with an unexpected beneficiary!
Tom Clancy
Famous author Tom Clancy passed away in October 2013, leaving approximately $80 million. His Will divided his estate into three buckets: one for the sole benefit of his second wife, one for the joint benefit of his second wife and minor son, and one for the benefit of his 4 children from his first marriage. Any estate taxes were supposed to be paid equally from the second and third buckets. This initial result would have resulted in 4 children splitting $7.85MM in estate taxes and his second wife and minor child sharing a $7.85MM estate tax burden.
Just before his death, Mr. Clancy executed a codicil (an amendment to the Will) that, amongother things, changed the tax apportionment clause. The wording was somewhat ambiguous, but resulted in the 4 older children being responsible for the entire estate tax burden of $15.7 million. Naturally, the children are unhappy with this result and are litigating.
Lesson learned: be very careful when creating documents that might be ambiguous and might cause one beneficiary to lose a significant part of his inheritance. In some cases, it may be better to rewrite a Will instead of merely adding a codicil so the estate plan can be viewed as one document instead of many documents.