Being rich and famous doesn’t make you immune to being human and making very ordinary mistakes with your estate.
A quick glance at some of the biggest icons of the last few decades who have died and left behind messy estate problems is enough to show anyone why a good will and estate plan is a must.
Take two music icons who left the world rather suddenly: Prince and Michael Jackson. Both had massive estates, significant fortunes and assets. The right to control their names and likenesses had (and has) the potential to bring in revenue to their heirs for decades to come.
Both had financial advisers and people who helped manage their intellectual and real property — and both died without having a clear estate plan in place that was designed to transfer wealth to future generations.
Here are four mistakes they made that you should avoid:
Get your will in place
Music icon Prince died without even leaving one and he didn’t have any direct heirs (children). That put everything he valued, including his name and likeness, up for grabs by wanna-be heirs.
Choose good executors
Prince’s executors have also been accused of incompetence — which has actually lowered the estate’s value due to a failure to jump on the interest sparked by the musician’s death. No matter who you are, get a will in place, name your heirs and appoint an executor with some business acumen.
Choose executors who aren’t going to try to cheat the Internal Revenue Service (IRS)
For example, Michael Jackson’s executors tried to pass off the value of his name and likeness as worth little more than $2,000. That’s tied the estate up in court since 2009 and cost a lot of legal fees that will probably end up being extra on top of what they’ll owe the IRS anyhow.
Get an appraisal for anything of uncertain value
It pays to have a third party with expertise make the appraisals — that gives the estate and the government a solid place to start when it comes to valuations. Had Michael Jackson’s executor’s done the same, it would have made things much easier for his heirs.
Keep in mind that wealth transfer can be complicated, so consider involving as many experts as necessary to get the help that you need to do it right.
Source: Kiplinger, “Iconic Estate Flops: What Michael Jackson, Whitney Houston and Prince Did Wrong,” Justin Brimmer, accessed Jan. 11, 2018