Celebrities. They make millions of dollars, have legions of fans and the world is in the palm of their hands. They also, no doubt, have the best estate planing attorneys providing them with advice that will ensure nothing ever goes wrong, right? Hardly. All too often, celebrities fall into the same estate planning traps that everyone else does. Why? For the same reasons it happens to the rest of us: we don’t take the time to sit down and deal with our estate planning issues regularly. Let’s take a look at the common estate planning issues that most often plague celebrities.
Issue 1: Failure to Update. According to a well-known estate planning attorney that works with a lot of celebrities, the most common problem celebrity estates face is the failure to keep up with new events. New marriages are can be problematic, especially when both spouse have children from previous relationships. Failing to update the plan after a new marriage can lead to no end of headaches.
Issue 2: Family Businesses. Many wealthy people obtain their status through the family business. The family ties, once mixed with a valuable business, can lead to hurt feelings, alienation, resentment and any number of problems if not handled carefully and thoughtfully.
Issue 3: No Prenup. Second marriages often bring the baggage of the previous relationships, yet the new spouses want to start clean. This often leads to a failure to create a prenuptial agreement. Prenuptial agreements, independent trustees and trusted fiduciaries can go a long way in preventing problems when new families are formed between the rich and famous, as well as everyone else.