This is Part 2 of Trial & Heirs’ Top 5 Celebrity-Based Estate Planning Conversation Starters for Thanksgiving 2011:
(Did you miss Part 1? Click here.)
3. Whitney Houston
Whitney Houston has been locked in a vicious court battle with her step-mother over a $1 million life insurance policy from Whitney’s father, which named Whitney as the sole beneficiary. Whitney’s step-mother, Barbara, sued Whitney and claimed the money was meant for her, not Whitney. Whitney had lent her father money and held a private mortgage over his home, which Barbara received when Whitney’s father died in 2003. Barbara said the life insurance was meant to repay that money and Whitney was supposed to release the mortgage and turn the rest of the life insurance money over to Barbara.
So did Whitney agree that the money was to repay the mortgage, allowing Barbara to keep the house free and clear? Heck no! She counter-sued Barbara, and said the life insurance was meant to repay other money she had lent her father. She asked the court to evict Barbara and used the counter-suit as a time to point out to the world, in a public court record, that Barbara was 40 years younger than Whitney’s father and met him as a maid cleaning his house.
A federal court judge in New Jersey ruled in favor of Whitney and dismissed Barbara’s lawsuit. But Barbara appealed, and the United States Court of Appeals just heard oral arguments about the case a few days ago (just in time for Thanksgiving, in fact). Barbara had some written evidence to support her claims. Will the appellate judges agree with her that the trial judge wrongly ignored that evidence in throwing out her case?
How does this tale relate to your family? When proper estate planning is done, life insurance works hand-in-hand with the legal documents. It’s often smart to name trusts as beneficiaries of life insurance policies, and then the owner can clarify in his or her trust who is to receive what, and why (among other benefits). That way, lawsuits like this one over why someone was named as a beneficiary can be avoided.
Do your relatives even know who is named as beneficiaries of their life insurance policies? We don’t recommend sounding nosy and asking if youare named, but you may want to politely suggest that your loved ones meet with their financial and legal professionals and make sure their beneficiary designations are done properly.
4. Arturo Gatti
Gatti was a former world-champion boxer who died at the age of 37 in 2009, under questionable circumstances, to say the least. It was officially ruled a suicide, but his family feels that he was killed by his wife (although a new investigation in Canada recently found no “hard and conclusive” evidence of murder). There’s even a wrongful death lawsuit that has been filed against the wife, Amanda Rodrigues. Officials in Brazil, where he died, initially said that Rodrigues was the prime suspect. Her purse strap had his blood, and she reportedly was in the room with his body for 10 hours without realizing he was dead.
So, perhaps it is no surprise that Gatti’s mother and brother fought Rodrigues over who should inherit Gatti’s estate, which has been valued at $3.4 million (prior to the legal fees, that is). Gatti’s family — who says they want his money to be split between his two children, one born to Rodrigues and one from a prior relationship — seeks to enforce a 2007 will. Rodrigues thinks the later will, signed three weeks before Gatti died, is valid.
A signed copy of the 2007 will, created before the marriage, cannot be located. The Gatti family accused Rodrigues of destroying it. They also say she used undue influence to coerce Gatti into signing a new will, which left everything to Rodrigues.
Recently, the lawsuit culminated in a three-week trial in Canada where the couple lived. The Judge is expected to make a decision soon.
The lessons here? Gatti procrastinated updating his will. His first will predated his marriage. The new will was done just weeks before he passed away, after two years of marriage. By then, there were big problems in the relationship which led to questions of whether Gatti really intended for Rodrigues to inherit. As with Kim Kardashian, all newlyweds should redo their legal documents and not wait.
It’s also a lesson to store original wills and other estate planning documents in a safety-deposit box, fireproof safe, or other protected place, where the executors can locate them. If Gatti really did intend for his 2007 will to govern, he should have made sure that the named executors knew where to find the original.
Do your loved ones know how to find your will or trust if tragedy should strike? If not, the holidays are a great time to have that discussion.
5. Nina Wang
The richest woman in Asia died in 2007, with a fortune valued at $13 billion (in US dollars). She had a will leaving all of her money to Tony Chan. Who was that? Why, her feng shui advisor, of course! This new will was supposedly signed a few months before she died, at age 69.
Chan said it was all about the love, claiming he and Wang were secret lovers for years … even though he was married to someone else. Wang really wanted him to inherit the billions, Chan protested. Sadly for Chan, after a trial that lasted for more than four months in 2009, the will was found to be a forgery. Chan lost the fortune and was arrested for forging the will. He appealed, of course.
Just a few weeks ago, Chan lost his final appeal, when the Hong Kong High Court affirmed the decision against Chan. He now faces jail time for the forgery, and of course lost out on the loot. Maybe they’ll let him arrange his jail cell according to the principles of feng shui.
It’s a sad reality that many people do try to take advantage of older people — even family members — to convince them to change a will or trust. Especially in these turbulent economic times, exploitation involving wills, trusts and estates is all too common. Families should be on the lookout, and work with experienced legal and financial professionals, to help guard against financial exploitation.
Here’s a link to the National Center on Elder Abuse’s Ten Warning Signs of Financial Exploitation, which you can use to protect your family over the holidays and throughout the year.
So you now have the stories to get your family talking at the Thanksgiving table. You can use them to find out if your loved ones have taken care of their wills, trusts, powers of attorney, and end-of-life documents. But don’t stop there! Have they been updated with new life events, like marriages, births and divorces? Does everyone have enough life insurance, and have the beneficiaries of their insurance policies been coordinated with their estate planning documents? For those with trusts, have they used the trusts properly and transferred their assets into their trusts?
Not typical dining conversation, we know. But, if it helps save your family from a fight someday, it will be well worth it.
Then the only thing to fight about will be who gets the last drumstick.
By Danielle and Andy Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights!, husband-and-wife legacy expert attorneys, and hosts of the national television special, Trial & Heirs: Protect Your Family Fortune! For the latest celebrity and high-profile cases, with tips to protect yourself, your loved ones, and your clients, click here to subscribe to The Trial & Heirs Update. You can “like” them on Facebook and follow them on Twitter.