Good Will Hunting: Estate Planning Lessons from Hollywood
After being asked how her husband died, the iconic Robin Williams character, Mrs Doubtfire, replied, “He was quite fond of the drink. It was the drink that killed him”. The response came, “How awful. He was an alcoholic?” Mrs Doubtfire quickly corrected, “No, he was hit by a Guinness truck. So it was quite literally the drink that killed him”.
The wisdom we can draw from Mrs Doubtfire’s words (in addition to looking before crossing the road) is that we need to be prepared for the unexpected. Estate planning is not something we normally think about as we go about our daily lives. However, failing to have a professional estate plan in place could have serious financial and emotional consequences for our families.
Eight months after his tragic death last year, a court battle is being fought between Robin Williams’ widow and his children over parts of his estate. It adds to a long and unfortunate tradition of celebrity estate planning battles.
Below we look at four lessons we can learn from the stars when it comes to planning our estate.
You need a will
Chris Kyle was the most lethal sniper in American military history. His autobiography, American Sniper, climbed to the top of the New York Times Best Sellers list and inspired an Oscar-winning film directed by Clint Eastwood and starring Bradley Cooper. His death in 2013 sparked a bitter dispute over who was entitled to the multi-million dollar windfall from the American Sniper franchise. The reason for the dispute? Chris Kyle died without a will (also called dying ‘intestate’). When he was alive, Kyle told friends that he regarded any earnings from his book as “blood money”. Before his death, he allegedly donated all of the proceeds to the families of two fallen Navy Seals and a charity for veterans. However, after his death his widow apparently withheld any money from the bereaved families. No lawsuits have been filed. As there was no will in place, the Navy Seals’ families’ chances of success would have been limited, even though public statements made by Kyle would suggest he would have wanted the families to continue to be supported.
If Kyle had died without a will in NSW, the distribution of his estate would have been governed by the Succession Act 2006 (Succession Act) and the Probate and Administration Act 1898. Under these laws, if an intestate dies leaving a spouse, then the entire estate goes to the spouse. Even if the deceased leaves children and a spouse, the spouse will still be entitled to the entire estate. The bottom line is that the laws surrounding intestacy are complicated. Legal battles between relatives can be costly and emotionally devastating. The most simple and cost-effective way to protect your loved ones and to ensure your wishes are respected is to leave a will.
Make sure your will is up to date
Heath Ledger became the second actor to receive a posthumous Academy Award for his portrayal of The Joker in The Dark Knight. His sister and parents accepted the award on his behalf. Those same family members were also the beneficiaries under his will. Unfortunately, the will was written three years before he died, and after the birth of his first daughter, Matilda Rose. This led to family disharmony that was played out in the public eye before Ledger’s father eventually promised the entirety of the estate to Matilda Rose.
If that promise was never made, under New South Wales law Matilda Rose could still have applied for a Family Provision Order. Under the Succession Act, family members or people with a particular relationship to the deceased can apply to the Supreme Court for a provision to be made out of an estate for a person’s maintenance, education and advancement in life. One of the categories of eligible people set out in section 58 of the Succession Act are children of the deceased. Matilda Rose would have been successful if a Family Provision Order application was made on her behalf. However, such claims are costly and time consuming. Heath Ledger’s death is a reminder that making a will is a positive step but it should not be a final step. Your will must be updated after important life events such as the birth of a child, a new marriage, divorce or starting a business.
Philip Seymour Hoffman was regarded as one of the most adaptable and creative actors of his generation. It is appropriate that his will reflects a similar flexibility and creativity. Wills can sometimes be as much statements of feeling as they are instruments of asset distribution. Many people assume that a will merely sets out how your possessions will be dealt with after you die. On the contrary, a good estate plan drafted by an experienced solicitor can be as flexible as your imagination. Seymour Hoffman recognised this and used his will to promote his values and goals. For example, he apparently expressed a wish that his son be raised in Manhattan, Chicago or San Francisco, or at least visit one of those cities twice a year. He included this in the hope that his son would be exposed to the culture, arts and architecture that those cities offer.
Creative or unusual provisions need to be precisely drafted. A standard will template or ‘do it yourself’ kit rarely allows for personalised or creative provisions. We have extensive experience drafting wills where the testator has not only allocated assets to his or her beneficiaries, but also included wishes that reflected his or her unique ideals.
Get a professional
Warren E. Burger was the Chief Justice of the United States Supreme Court between 1969 and 1986. Under his leadership, the Court decided Roe v Wade among several other landmark judgments. Assumedly an advocate for concise legal drafting, Chief Justice Burger decided to write his own will using only 176 words. Unfortunately, one of the most prominent figures in American legal history left out, among other things, basic tax clauses that would have saved his estate over $450,000 in estate taxes.
Writing your own will is fraught with danger. Particularly, if you want to minimise the tax burden on your estate, there are a range of measures lawyers can take when drafting your will. For example, testamentary trusts in your will can assist with tax planning and can help protect your beneficiaries from potential creditors. There are also strict, technical requirements with regard to witnessing and executing a will in order for it to be valid.
Robin Williams once said, “There is still a lot to learn, and there is always great stuff out there. Even mistakes can be wonderful”. With respect to estate planning, we agree that there is still a lot to learn. We are continuously considering new and innovative ways to effectively draft wills. However, as Hollywood has often demonstrated, mistakes in your estate plan should be avoided at all costs in order to protect the people you care about.