Eccentric New York real estate mogul Leona Helmsley died leaving her little Maltese $12 million. Two of the hotel magnate’s grandkids, left with nothing but memories, took the matter to court. After months of legal wrangling, the grandkids were awarded $6 million combined, while the dog’s inheritance was reduced to $2 million.
More often, jilted heirs don’t hound the dog, but instead go after relatives who got the longer end of the stick. In the case of the estate of billionaire J. Howard Marshall, who died at age 89, only shortly after marrying Playboy model Anna Nicole Smith, it was a battle between widow Smith and her (much older) stepson. Family feuds also erupted over the estates of Hyatt hotel founder Jay Pritzker, socialite Brooke Astor, singers James Brown and Whitney Houston, and comedian Lucille Ball, to name just a few. And the Michael Jackson mess is just getting started. “Throw a dart at any list of deceased celebrities and chances are that you’ll hit upon someone whose family members fought over the inheritance,” says Adam Schucher, a Fort Lauderdale, Florida, attorney specializing in estate planning and administration.
Of course, it’s not just celebrities who die without making proper arrangements. Fewer than half of all adults have a will. And you can bet that those same people do not have an advance healthcare directive, either. Yet these are among several documents that you, as a responsible adult, need in place—for your own well-being and for the harmonious future of your family.
• A will. OK, you know what this is—the basic who-gets-what document. But, do you have one? Without a will, whatever you leave behind will be distributed per the laws of your state, which might mean that someday one of your least favorite relatives may be comfortably sleeping in your bed and eating off your fine china. If you have young children, the will names their guardians. The will also names an executor, who will handle the nitty-gritty details and usually gets compensated for the hassle, which can be considerable.
• An advance healthcare directive or living will. It lets you make end-of-life decisions in advance. If you were in a coma, for example, would you want to be kept alive by artificial means even if there was little hope of regaining consciousness? [For more on the horrors of failing to have a living will, see “How Doctors Die”]
• A healthcare surrogate designation. The living will can’t foresee every possibility. You also need a surrogate to make day-to-day medical decisions for you, should you no longer be able.
• A durable power of attorney. This gives power to another to handle essential matters beyond healthcare, such as managing your bank accounts, should you become unable to do so.
The bottom line: Every adult, and especially those with minor children, should have these documents completed, signed, and saved. Simple wills may be drawn up for as little as $150. Complete estate plans—which might include various trusts to allow for the smoother transition of assets and possible tax breaks—could run to $3,000 or more.
If you wish to save a few dollars, and don’t mind putting in some legwork, most state government websites offer some forms, including the advance healthcare directive form, for do-it-yourselfers. Need guidance? State bar associations often have an attorney referral service. You can also contact your county courthouse, and ask for a list of local pros who handle estate law. “The most important thing is that you don’t succumb to decision paralysis,” says Connie Fontaine, who teaches graduate-level estate planning at The American College in Bryn Mawr, Pennsylvania.
And finally, even if you have an estate plan, you need to update it regularly. “Refreshing is often a simple matter,” says Fontaine, who suggests casting an eyeball on your estate plan at least once every two years, or whenever you experience a major life change, such as a move or a death in the family. Had Leona Helmsley reviewed her plan in a calmer moment, who knows? She might have thought twice about her rather unusual pooch bequest and saved her heirs a major headache.