The recent deaths of celebrities like Michael Jackson and Brittany Murphy has put the spotlight on estate planning. Of course, you don't have to be rich or famous to plan ahead. In fact, regardless of assets, every adult should have a will. But the rich and famous have taught us a few things about what to do and what not to do.
Before we dive into lessons learned from celebrities, let's start with a primer on key estate planning documents. The top three are a Last Will, a Living Trust and a Living Will.
Many people are familiar with a Last Will—a legal document used to distribute property to beneficiaries, specify last wishes, and name guardians for minor children. Regardless of assets or age, every adult should have a Last Will.
A newer and lesser-known option is a Living Trust. A Living Trust can be used to distribute property and has more privacy than a Last Will. It can also help avoid a costly and stressful probate court process. Often, a Living Trust can also offer substantial tax benefits.
A living will lets you specify decisions in advance about what types of medical treatment you would want in the event you become incapicitated and are unable to communicate your wishes. It protects your loved ones from having to make agonizing decisions on your behalf.
Estate Planning Gone Wrong
Looking at the recent passing of Brittany Murphy, Tim Nudd at People.com reports, “Brittany Murphy had a will drawn up and executed before she met husband Simon Monjack, and it stipulates that her estate be left to her mother, Sharon Murphy...but it's not clear whether or not Murphy revised her will after getting married.”
Murphy could have discussed a Living Trust with her family. Provisions for her mother and her husband could have been held in separate trusts and may have been beneficial from a tax standpoint and offered some privacy to her grieving family.
Michael Jackson did have a Trust set up called The Michael Jackson Family Trust. But according to Danielle and Andrew Mayoras of Wowowow.com, Jackson never actually transferred his assets into the trust. As a result, his estate is going through the public court probate process where his family and finances are coming under intense scrutiny.
What You Can Learn From These Situations
It also appears that neither of these celebrities had a Living Will. Despite the lessons learned from the tragedy of Terri Schiavo, who fell into a persistent vegetative state at only 26 and was the subject of a prolonged and agonizing court battle between her husband and her parents, many Americans still don't have a Living Will.
According to the AARP, some people simply ignore the difficult topic, while others worry about medical professionals withholding care, or worse yet, violating religious doctrine. But these concerns can and should be overcome. Medical professionals abide by a strict code of ethics and the law. And many religions have specific provisions for healthcare advanced directives.
Making your wishes clear in an up-to-date, legally solid Last Will, Living Will and/or Living Trust can give you peace of mind, and can save your loved ones from unnecessary hardships. It is truly one of the most loving gestures you can make toward those most important to you.
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