A popular assumption is that if people have significant wealth, as many celebrities do, they may spend a great deal of time on their estate plans in order to preserve the wealth for their heirs and beneficiaries. However, celebrities are as human as the next person, and they make estate planning mistakes just like anyone else. Fortunately, many celebrities die with as much publicity as they lived. This means that New Jersey residents are in the unique position of being able to learn from their estate planning errors.
For instance, when "The Sopranos" actor James Gandolfini died from a massive heart attack, his family ended up owing the IRS somewhere in the neighborhood of $30 million in estate taxes. This is because his estate plan did not include any provisions to limit -- if not eliminate -- the tax liability of his estate. Therefore, 40 percent of every dollar over the federal exemption will go to the IRS.
Robin Williams decided to use a trust to protect his children's privacy. Sadly, he failed to keep the document updated, and one of the trustees of that trust had passed away. When he died, the provisions of his trust became public, and the information he sought to keep private became public.
Even if reducing his or her taxable estate is not the main focus of a New Jersey resident's estate plan, it does bear some consideration. Otherwise, the opportunity to reduce, or even eliminate, estate taxes could be missed. Also, when the initial estate planning is complete, that does not mean that the plan can be put on a shelf and forgotten. A periodic review can make sure that everything is up-to-date.
Source: theepochtimes.com, "4 Lessons from Celebrities Who Messed Up Their Estate Planning Big Time", Tommy Wyher, Jan. 23, 2015