Estate planning is important for everyone, but it is more important for some people than it is for others. Celebrities who have very significant financial resources are risking big losses if they don’t plan ahead intelligently.
This is because of the existence of estate taxes. The federal estate tax carries a maximum rate of 40%, and a number of states also have a state-level estate tax.
Another thing to consider when you’re thinking about celebrity estate planning is the fact that many celebrity estates will continue to earn money after the individual in question has passed away.
Given this reality there is a long-term dimension to consider.
As a case in point, look no further than the estate of the iconic actress Marilyn Monroe.
We do not know the exact value of Marilyn’s estate at the time she passed away. However, actresses in her day did not earn the kind of money that they do today.
However, long after she passed away her image was used to generate enormous amounts of money.
Most of the estate of Marilyn Monroe was inherited by one of her acting teachers, Lee Strasberg. His wife at the time of Marilyn’s death, Paula, was an actress who coached Marilyn as well.
Paula predeceased her husband Lee. He subsequently got remarried to a woman named Anna, and after he died Anna inherited the Marilyn Monroe estate and its enormous earning potential.
She eventually sold her rights for millions. Marilyn Monroe had never met Anna.
This is the kind of thing that can take place if you don’t think things all the way through when you’re planning your estate.
I’m Too Young to Worry About It
People sometimes procrastinate when it comes to estate planning because they take the attitude that they are too young to worry about it. The young often feel invincible, and this may be even more true for professional athletes.
Steve McNair was a fine NFL quarterback for a long time. He was just 36 years of age when he was gunned down by his mistress in 2009.
McNair did not have an estate plan in place. He was legally married at the time of his death, he had children, and he left behind very significant financial resources.
However, they were not immediately available to his family because he didn’t leave a will behind and the probate court asserted control.
In addition, according to reports his mother was living in a home that he purchased for her use. But apparently it was not in her name, so it became part of the probate estate and she was forced to leave the home.
This story demonstrates why it is important for people of all ages to take action for the well-being of their loved ones.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.