Why is it that so many individuals, even many attorneys, don’t take advantage of estate planning strategies that could save money, protect their family, and have greater control over the management of their assets rather than leaving it in the hands of the probate system? Time and time again I see news stories detailing the poor estate planning among the rich and famous.
In fact, statistics show that even many attorneys don’t have wills. Of course, just because someone is an attorney, doesn’t mean that he or she has significant knowledge or expertise in the arena of estate planning.
For example, the late Chief Justice of the Supreme Court of the United States, Warren Burger, attempted to write his own will and it ended up costing his family about $400,000 more than if he had properly planned his estate.
On this blog and with my clients, I’m often talking in terms of hypothetical examples of why estate planning is needed. But here are some real life examples of families that did and did not benefit from proper estate planning:
|Name||Gross Estate||Settlement Costs||Net Estate||Estate Shrinkage|
|J.P. Morgan||$17,121,482||$11,893,691||$5,227, 791||69%|
|John D. Rockefellar||$26,905,182||$17,124,988||$9,780,194||64%|
|Conrad N. Hilton||$199,070,700||$105,782,217||$93,288,483||53%|
|William E. Boeing||$22,386,158||$10,589,748||$11,796,410||47%|
|Cecil B. DeMille||$4,043,607||$1,396,064||$2,647,543||35%|
|Erle Stanley Gardner||$1,795,092||$636,705||$1,158,387||30%|
|Harry M. Warner||$8,946,618||$2,308,444||$6,638,174||26%|
The probate of Elvis’s estate took a whopping 12 years to complete and a staggering 73% of the estate was consumed by the settlement process (and the estate was subsequently re-opened in 2008 and is still ongoing)! The above settlement costs include debts, administrative expenses, attorney’s fees, executor’s fees, state estate taxes, and federal estate taxes. In contrast, due to prior planning, Any Warhol minimized the shrinkage of his estate to a mere 2.3%.
Other famous examples demonstrate the importance of estate planning for protecting oneself during life. For example, Groucho Marx had a will, but had failed to plan for a potential disability or incapacity. During the final three years of his life, his guardianship hearing became a public spectacle as three parties fought for control of his care and his wealth. For three years he was wheeled in and out of court will little consideration for his dignity or feelings during the trial.
So while the above might serve as decent dinner conversation fodder, don’t follow in these celebrities footsteps--make sure you have an up-to-date, comprehensive estate plan in place! To get started, register for an upcoming seminar or call our office at 919-443-3035 to schedule a Vision Meeting.