AN EXAMINATION OF THREE FAILED CELEBRITY ESTATE PLANS

The Rich and Famous Always Do The Right Things When It Comes To Preserving Wealth and Protecting Their Families (Or So We Thought)

BARRY D. HOROWITZ
Connecticut Estate Planning Attorney

We can sometimes take away valuable lessons when we learn about the mistakes of others. When it comes to estate planning you may not hear a lot about the details when ordinary people pass away. However, when famous celebrities die the details of their estate planning efforts (or lack thereof) are often times well-publicized. With this in mind we would like to examine three failed celebrity estate cases in this paper. You may think that the rich and famous always do the right things when it comes to preserving wealth and protecting their families. These stories would indicate otherwise.

The Estate of NFL Quarterback Steve McNair

Steve McNair rose to fame as the leader of the Tennessee Titans. He was the third overall pick in the 1995 NFL draft out of Alcorn State, which is in McNair's home state of Mississippi. McNair was a high draft pick and star player. He made three Pro Bowl squads, led his team to the Super Bowl in 1999, and was voted the MVP of the National Football League by the Associated Press in 2003. After that 1999 season when Steve McNair took the Titans to the Super Bowl he signed a six-year contract that paid him $47 million. You would think that someone who was in his financial stratosphere would have expert financial advisors making sure that he had a solid estate plan in place. Of

An Examination of Three Failed Celebrity Estate Plans

Nirenstein, Horowitz & Associates

course he would want to provide for his family properly, and there is the estate tax to consider as well. If your assets exceed the exclusion amount, and McNair's certainly did, you must take steps to position your resources with tax efficiency in mind. If you don't, the taxman will consume a significant portion of your financial legacy. In 2009 Steve McNair was murdered by his girlfriend. She took her own life after killing McNair. This woman, Sahel Kazemi, was just 20 years old. McNair died at the age of 36. Back in 2009 the federal estate tax rate was 45%, and the exclusion was $3.5 million.

Steve McNair died without a last will or any other estate planning devices, such as a trust or trusts. As a result it was up to the probate courts to try to sort things out, and his assets were frozen.

Steve McNair died without a last will or any other estate planning devices, such as a trust or trusts. As a result it was up to the probate courts to try to sort things out, and his assets were frozen. There are intestate succession rules that would place his surviving spouse first in line for an inheritance. Children are entitled to a percentage as well in some cases, and McNair had children before he married his wife Mechelle. He also had two children with Mechelle. No immediate access to the funds was forthcoming, and this was part of the problem. In addition, Steve McNair's mother suffered greatly because of his lack of planning. The court made Mechelle the personal representative of the estate. She found out that the house that McNair had built for his mother was in his name, not his mother's name. Subsequently she demanded $3000 a month rent for the property that McNair's mother Lucille had been residing in for years. Because she couldn't pay this amount she was forced to vacate the property.

An Examination of Three Failed Celebrity Estate Plans

Nirenstein, Horowitz & Associates

To add insult to injury, she took some appliances and other items with her, saying that she had purchased them. Mechelle would have none of it and she instructed her attorneys to attempt to recoup the value of the items, which was in excess of $50,000. If Steve McNair would have planned ahead appropriately all of this could have been avoided.

Marilyn Monroe's Estate

The estate of Marilyn Monroe ultimately wound up in the hands of someone that she had never met. She left two-thirds of her assets to one of her acting teachers, Lee Strasberg. Marilyn was also close to Lee's wife Paula, who gave her acting lessons as well. It is said that they were kind of like de facto parents to Marilyn. Lee Strasberg was eight years older than Paula. It would be natural to assume that Lee would predecease Paula. Working with that assumption, the worst-case scenario would involve Paula winding up with Marilyn's estate, and this would probably be fine with Marilyn. However, a far different scenario presented itself. Paula died first, and Lee got remarried to a woman named Anna. When Lee passed away Anna inherited Marilyn Monroe's estate. She got busy licensing and marketing Marilyn Monroe's image, and the money started pouring in. Ultimately, she sold the rights for somewhere between $20 million and $30 million. All of this coming from a woman that she had never been introduced to.

An Examination of Three Failed Celebrity Estate Plans

Nirenstein, Horowitz & Associates

The Estate of Sammy Davis, Jr.

When you look at the list of the television projects, movies, albums, and stage productions that featured Sammy Davis, Jr. it is truly incredible. He also performed live, and he is widely considered to be one of the greatest consummate entertainers of all time. While he was extraordinary at what he did, he apparently was not a very good manager of money. In spite of the fact that he earned millions of dollars over the course of his lifetime, he didn't have anything left over to leave to his loved ones. He did execute a last will, but there was nothing left to distribute. This is a different type of estate planning case. He had the document, but he didn't stick to a financial plan that would result in a financial legacy to leave behind. Since he took the time to draw up a will and carefully select inheritors you have to think that he wanted to take care of these individuals. His actions during his life made this impossible.

Conclusion
As you can see from these cases, there are different types of mistakes that you can make when you're planning your estate. The key is to be proactive early on during your adult life to put an initial estate plan in place.

An Examination of Three Failed Celebrity Estate Plans

Nirenstein, Horowitz & Associates

This can be part of a broader financial plan that is constructed with legacy planning in mind. You should develop an ongoing relationship with the attorney who draws up your original estate plan and make revisions as things change in your life so that you are always appropriately prepared.

References
NPR http://www.npr.org/2012/08/03/157483945/monroes-legacy-is-making-fortunebut-for-whom http://www.npr.org/templates/story/story.php?storyId=94640586 About.com http://wills.about.com/b/2011/07/20/steve-mcnairs-estate-demands-moneyfrom-his-mother.htm

An Examination of Three Failed Celebrity Estate Plans

Nirenstein, Horowitz & Associates

About the Author

Barry D. Horowitz
Estate Planning Attorney Barry D. Horowitz is a founding partner in the law firm of Nirenstein, Horowitz & Associates, P.C. He received his diploma from the Loomis Chaffee School and his Bachelor of Arts from Bennington College, where he dual majored in philosophy and music. Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award. After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award. Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court. He is a member of the Hartford County Bar Association, a charter member of the American Academy of Estate Planning Attorneys, and has recently received the American Academy Award. Mr. Horowitz is also an active member of the Connecticut Bar Association where he is a member of the Elder Law Section, the Estate Planning and Probate Section, and the Professional Ethics Committee. Mr. Horowitz practices exclusively in the area of Estate Planning where he has earned a reputation as a dynamic and entertaining speaker. He also has recently published a book entitled Guiding Those Left Behind in Connecticut. Nirenstein, Horowitz & Associates, PC Living Trust and Estate Planning Attorneys Serving the State of Connecticut with Offices in Greater Hartford, Fairfield County, CT www.PreserveYourEstate.net HARTFORD Gothic Park 43 Woodland St., Suite 520 Hartford, CT 06105 Phone: (860) 548-1000 An Examination of Three Failed Celebrity Estate Plans WESTPORT 191 Post Road West Westport, CT 06880 Phone: 203-221-2617 Nirenstein, Horowitz & Associates