As if dying isn’t bad enough, imagine your ex (your no-good, lying, cheating ex!) rolling in all the money you left behind. And, worse, your beloved family fighting it out in court to get what they can. Time to update your estate plan, right?
Indeed, outdated documents, beneficiary blunders and other estate-planning mistakes can tie your assets up in court for years, allow taxes and legal fees to eat up a chunk of your estate, and give inheritances to people you didn’t have a good relationship with or hardly knew.
Making sure your estate ends up with the right people is more complicated than just drawing up a will. IRAs and 401(k) accounts, for example, have their own named beneficiaries—and will automatically pass to the designated person, regardless of what’s in your will. But many people fail to update the beneficiaries on these accounts. And a will isn’t enough to protect your estate from court battles, taxes and probate—all of which can be time-consuming and expensive. But trusts, when used correctly, are a great tool to shield your assets from the probate process.
Anyone—from someone with a simple estate to someone with substantial net worth, numerous assets and a team of advisers at his or her disposal—can make planning missteps that have far-reaching consequences. Aretha Franklin, for instance, who passed away in August 2018, is just the latest celebrity to die without a will. Consider these six well-known people who made estate-planning mistakes that punished intended heirs.
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