BOSTON (TheStreet) -- Marlon Brando, Michael Jackson, Princess Di and Michael Crichton are among the well-known figures invoked to explain the do's and don'ts of estate planning by legacy attorney Danielle Mayoras.
The book is intended to help families, regardless of income level, avoid the financial pitfalls that drained bank accounts and created huge family rifts for the dozens of celebrities whose squabbles are detailed within its pages.
"No matter what group I was speaking to, whether it was financial advisers or an organization of families, someone from every audience would raise their hand and ask, 'How do I get my clients to talk about these issues?' or 'How do I get my loved ones to talk about these issues?' It was always a question you knew you were going to get, but there was never an easy answer," Mayoras says.
The couple decided that the gossipy appeal of celebrity estate battles would be an entertaining way to address what many see as a boring, dreaded subject.
A recent example of celebrity estate planning gone wrong is the high-profile battle over the remaining assets of the actor Dennis Hopper.
Before Hopper died, he filed for divorce from his fifth wife, Victoria Duffy-Hopper. Her claim is that the attempted divorce was the result of pressure from his children and a move to cut her out of the estate plan. According to the couple's prenuptial agreement, if they were divorced or no longer living together, she would not inherit 25% of his estate and other insurance-related assets.
Duffy-Hopper has filed a $45 million claim against Hopper's estate, claiming, among other things, that she is owed $10 million for defamation of character arising from public comments Hopper made during their divorce. Hopper's trust has countersued, claiming she stole artwork.
Michael Crichton, author of such blockbusters as Jurassic Park and Sphere, shows that documents need to be updated ahead of life events -- a divorce, a pregnancy -- not after they occur.
Crichton's wife, Sherri Alexander, has filed a $7 million claim against his estate, citing a prenuptial agreement signed in 2005. Alexander is also fighting to allow her son to be included as an heir, despite language in Crichton's will disinheriting any children born after it was written. The focus of all the legal wrangling may, ultimately, hinge on how much, if anything, an 8-month-old baby is entitled to.
Self-appointed King of Pop Michael Jackson's death holds numerous lessons on how not to prepare for your demise.
He was smart enough to establish the Michael Jackson Family Trust. But he never carried through with its funding.
"If he had funded the trust, there would have been a lot less courtroom drama," Mayoras says.
Another point of contention is that non-family members were named as executors and trustees. They get a percentage of any deal they sign on behalf of his estate, an extremely profitable arrangement given the spike in sales after his death. Adding to the drama: Jackson's father, Joe Jackson, was left out of his will or trust, leading to a legal battle over what, if anything, he was entitled to.
Jackson's death at 50 carries two major lessons. One is to "finish what you start," as evidenced by his poorly constructed trust fund. The other is that "estate planning isn't just for people who are old," Mayoras says.
In the case of actor Heath Ledger, his estate plan became controversial because he never updated his posthumous plan to provide for his infant daughter.
An example of a public figure who did things right was the late U.S. Sen. Edward Kennedy, who created a living trust and directed that all of his assets pass into it. His best move, according to Mayoras, was choosing a trusted confidant, Paul Kirk, rather than his wife or children to administer the estate.
"Choose your executor and trustees wisely," she says. "That's half the battle. I'd always counsel clients to choose a family member if you trust them, but there is something to be said for choosing a nonfamily member that everyone respects. Then you don't have the same family dynamics coming into play."
Many people don't think of themselves as having an "estate" -- that the term applies only to the wealthy.
"A lot of people think they don't have an estate, but forget they might have a $1 million life insurance policy or money in their tax-deferred plan. There is also the value of their house. I know the housing market is not great right now, but chances are the beneficiaries are going to sell the house, and it will become a liquid asset as well," Mayoras says.
A key takeaway from the book is that "having fame and wealth doesn't seem to make people any less prone to oversights and mistakes," Mayoras says. It is important that an estate plan fully express the wishes of the deceased.
Verbal discussions won't cut it, a lesson seen in estate battles following the death of actor Marlon Brando.
His will was contested on the grounds that revisions were made after he began suffering from dementia and paranoia. Complicating the distribution of his assets were claims made by his longtime maid that he repeatedly made her an offer she couldn't refuse: a post-death share of his wealth. The maid, Angela Borlazi, also claimed Brando's original choice of trustees was fraudulently changed (she questioned his competence and physical ability to redo documents in the final days of his life). She eventually settled with the estate for nearly $250,000.
It is also important to directly spell out your wishes and not leave thing to the discretion of executors. That lesson was made clear in the aftermath of Princess Diana's death.
Diana left a "letter of wishes" asking her executors to "divide, at [their] discretion," her personal property and give one quarter to her godchildren. Each godchild would have received roughly $163,000, but the executors never divvied up the money. They convinced the court to disregard the document and instead give each a single memento (which the authors point out included "an incomplete tea set and a commercially available watercolor painting").
Mayoras stresses the importance of having professional guidance when planning a will, not just relying on software programs or an attorney who doesn't specialize in such matters.
The late Supreme Court Justice Warren Burger, despite having a $1.8 million estate, crafted a will of just 176 words. His estate ended up having to pay thousands of dollars in probate court because his will failed to give co-executors the power they needed to sell real estate, pay taxes and otherwise manage the assets.
"Here we have a brilliant justice, from the highest court in the land, who is a perfect example of 'don't do it yourself,'" Mayoras says.
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