A number of famous actors have passed away in the last year. Not only have their premature deaths rocked the entertainment industry, the inadequacy of their estate plans are causing many people to rethink and update their own plans.
Estate planning is an important process for adults of any age and financial status. A well-constructed estate plan can help provide for those you love while ensuring that your hard-earned assets are distributed with a minimum of tax liabilities and disputes among family members.
Learning from others’ mistakes
When James Gandolfini died last year, his final will became a hot topic because it appeared as if he had failed to do any estate tax planning. While no one can say with certainty what he intended with his will, he probably did not wish to give nearly 50 percent of his estate to the Internal Revenue Service. Trusts and lifetime gifts can help avoid some issues of taxation but planning is essential and updates are necessary as laws occasionally change.
Philip Seymour Hoffman’s death also held some warnings for people who put together estate plans but fail to update them as their families grow. Nearly 10 years ago – when his young son was just one year old but prior to the births of his two daughters – he drafted his final will. While state laws provide for after-born children – those born after the creation of a will – Hoffman probably would have set up his plan a little differently in order to provide for them equally, without creating a probate nightmare for his family.
Hoffman was not married to the mother of his children, which caused additional issues for his estate. Estate planning is especially important for unmarried couples. Without the benefit of powers of attorney or healthcare directives, the most important person in your life may not be allowed to be at your side during a hospitalization or have rights to your financial assets or a shared home after your death.
Other essential issues that should be addressed in your estate plan may include the following:
- Nominating a guardian for a minor child or an adult with special needs
- Appointing a caretaker of your financial assets
- Designating recipients of personal assets, such as family keepsakes or pets
- Establishing trusts to privately distribute assets as you desire
- Setting up probate avoidance tactics
Seek legal advice
If you do not have an estate plan or have not recently updated your plan, consult an experienced estate planning attorney and ensure that your plan meets your family’s needs as well as fulfilling your desires.