Beyond The Will
Learning From Famous Mistakes: Part 2 – Failure to Review and Update Documents
November 21, 2019
Pop culture periodicals have been telling us for years that celebrities are “just like us” – they go grocery shopping, they drive their kids to school, they walk their dogs. This holds just as true in the Probate world as in the tasks of everyday life. This multi-part series will examine several famous mistakes that celebrities have made in their Wills and Trusts and will offer tips as to how we can avoid making those same mistakes.
Part 2. Failure to Review and Update Documents
A few weeks ago, we talked about celebrities who died without putting an estate plan into place. In this installment of “Learning from Famous Mistakes,” we’ll learn that simply creating an estate plan is not enough. It is just as important to review and update the estate plan over time to account for changes in life circumstances.
Heath Ledger died of a tragic overdose in 2008, at age 28, leaving behind a 2-year old child, Matilda, with his former partner, Michelle Williams. Unfortunately, Mr. Ledger also left behind a Will that he had executed in 2003, leaving everything to his sisters and parents. The Will predated both Matilda’s birth and the bulk of Mr. Ledger’s wealth; at the time the Will was executed, Mr. Ledger was childless and had an estimated net worth of only $118,000, a far cry from the multi-million dollar estate his family stood to inherit in 2008. Mr. Ledger’s family reportedly “decided” that his assets should rightfully pass to Matilda, honoring what they believed would be Mr. Ledger’s wishes even though it was not what the will provided. Had Mr. Ledger died in Massachusetts under these circumstances, Matilda would have had a statutory claim as an “omitted after-born child,” with her interest dependent on the laws of intestate succession, as though Mr. Ledger had no will at all, because he failed to update it after her birth.
While all seems to have worked out well for young Matilda, all was not quite as well for the long-term partner and children of acclaimed singer Barry White. Though Mr. White had been separated from his second wife for many years, the two never divorced, and he never updated his estate plan. His estranged wife, therefore, inherited nearly everything, and years of litigation ensued. Looking again at what Massachusetts would do in these circumstances if Mr. White had actually divorced his second spouse, any benefits for her in a prior estate plan would be revoked by operation of law. Here, though, where the parties were separated but not divorced, that statutory protection would not apply.
Don’t let this happen to you. Once you have created an estate plan, you should take the time to review and update it as necessary, generally at least once every five years, or more frequently if you experience a significant change in your family or financial circumstances. In addition to reviewing your will (and, where applicable, your trust), it is critical to review and update beneficiary designations on a regular basis as well, to ensure that assets such as life insurance policies and retirement accounts are set up to pass to the beneficiaries you currently intend.
Until next time!
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