More than 50% of Americans die without creating a Living Trust that details how they will distribute their estates. The reasons for not creating a Trust are endless, but they're really just excuses. Below are some high-profile examples of very typical excuses for not creating or updating Living Trusts. Regardless of the excuse, the results are always the same: long, expensive probate ordeals for their families.
You may or may not be old enough to remember Sony & Cher. After the duo broke up, Sony remarried, moved to Palm Springs, became a politician, skied into a tree at Heavenly and died at the age of 62 without so much as a simple Will. His wife had little time to grieve because she became the administrator of his estate, defending a claim from Cher who believed she was still owed money from their divorce. A secret love child also surfaced and demanded a piece of Bono's estate.
Failure to Fund It
Michael Jackson created a Trust, but failed to fully fund it. A Trust means nothing unless you move your assets and real property into it--when it becomes a powerful legal document. Jackson’s failure to fund his Trust made it much easier for his family to duke it out in probate court, turning this into a public spectacle.
Former Supreme Court Justice Warren Burger created his own Will, which consisted of 176 words. Some thought it was part of his imperious nature that he failed to prepare for his death at the age of 87. He left out key provisions and his family paid the price-- his children paid more than $450K in estate taxes. Burger’s lack of a proper Trust caused many people to wonder how someone who reached the top of his profession died without the one thing he could have used: a good lawyer. While he served on the highest court in the land for 17 years, he had a fool for a client.
Jimi Hendrix apparently thought he’d live forever because he didn’t do any estate planning. He died at 27 in 1970. He was, however, a child of the 60s, and may have been in an extended Purple Haze. Nevertheless, his estate was thrown into a lengthy and expensive court fight that took some 30 years to settle. Jimi's father, Al, sued for the rights to Jimi's music, and finally won in 1995. Under the name of the estate, Al created multiple trusts, partnerships, and corporations, notably Experience Hendrix, L.L.C. based in Seattle.
Failure to Update Your Trust
For millions of Batman fans, Heath Ledger will forever be remembered as the Joker, though his daughter may remember him best for never having added her to his Will. His sudden early death of a drug overdose led to chaos, family infighting and lots of bad press. Ledger was just 28 when he died—another tragic victim of a drug overdose. In general, a Living Trust should be reviewed every few years, updated in the event of divorce, births or deaths and major investments.
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