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Avoid these celebrity estate planning mistakes

Estate planning, like taxes, is something most people would rather put off until later. However, when it comes to life and death, we can't be sure there will be a later. There are lessons we can learn from reading about celebrity deaths.

Many celebrities have died without wills, leaving family members to squabble over their millions. Included in that list are big names like Bob Marley, Amy Winehouse, Jimi Hendrix, Prince and many others. Celebrities that did take the time and effort to create wills and trusts often made some very big mistakes or omissions.

Fast and Furious star Paul Walker, who died young at the age of 40, managed to leave a will. He left his fortune (to the tune of $25 million) in a trust for his teenage daughter with her mother as her guardian. However, he had not updated his will in 10 years, so if he meant to include his girlfriend, she was sadly left out.

Heath Ledger, another actor who died very young, had also not updated his will in many years. He left his fortune to his parents and sister. Since he had a daughter after the will was created, she was not included.

Audrey Hepburn left a will with instructions for all of her Hollywood memorabilia to be divided between her two sons. However, because they couldn't agree on who got what, they ended up in a court battle in 2015. A detailed list of who got what might have avoided this.

Paul Newman left his daughters completely out of his Newman's Own business. Apparently, he had been telling his family contrary to that before his death, and a dispute ensued between them and the head of the company. Being honest and upfront with family members can set their expectations.

Philip Hoffman left his fortune to his long-time partner. He trusted that she would use the funds for herself and to raise their children. What he failed to realize was that there would be consequences for the two not being married. A spouse can inherit any amount of money without having to pay estate tax, but not an unmarried person. The IRS ended up with $15 million of his $35 million fortune.

Don't put off doing your estate planning, but do it with the help of an attorney so you will not make the same mistakes made by these celebrities.

Source: everplans, "7 Crucial Estate Planning Lessons From Famous People," accessed March 08, 2018

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