What do Prince, Frank Sinatra Jr., Jose Fernandez and Tom Clancy have in common beyond the fact that all were famous and each died in the last few years?
All four also left their multimillion-dollar estates in a mess.
Now the heirs and would-be heirs are trying to sort out what they are entitled to and judges are trying to determine what the heirs of the ultra wealthy benefactors have a legal claim to.
William W. Sleeth III says most of the headaches these four created could have been avoided. Sleeth is a partner in the national law firm of LeClairRyan and the leader of the firm’s estate and trust litigation team.
“Litigation over money is a long-running trend that continued in 2016 as people continued to die and families continued to fight over the estates,” he says.
The first rule in avoiding estate problems is to always have a will and estate plan in place no matter what your age and put it in a place where people can find it. Singer, songwriter, musician Prince was a relatively young 57 when he passed away last April. He had hundreds of millions of dollars but no will. That prompted would-be heirs to appear from everywhere.
“Prince was very sophisticated when it came to protecting his property rights for his music, but not for his money,” Sleeth says. As of now, it seems Prince’s younger sister and five half-siblings are the heirs, but the case is still in court.
The second rule is to hire good attorneys and listen to them. Singer, songwriter Frank Sinatra Jr., did things his way like his famous father, Sleeth says.
Sinatra and his wife, Cynthia, were divorced but did not separate. They continued to live together as husband and wife for years, giving Cynthia the impression that she was a common law wife and entitled to benefits while he was alive and an inheritance when he died.
The two were already involved in litigation whenSinatra died in March while on tour. The litigation continues.
“Sinatra Jr. could have avoided this mess in large part by having been more careful with his decisions and actions, chiefly by consulting with and listening to his attorney,” says Sleeth. “People need to be extremely careful that their actions don’t give their lover a basis to claim that the parties had a common law marriage.”
Rule number three is make sure to make provisions for those you want to take care of. In September, Florida Marlins pitching ace Jose Fernandez passed away at the age of 24 in a boating accident off the coast of Miami Beach. He was unmarried but his girlfriend, Maria Arias, was pregnant at the time of his death.
In order for the estate, worth millions, to take care of Arias, or at least the child, the couple would have needed to be married or Fernandez would have had to put money in a trust for the child. Or he would have at least had to agree in writing to give them a certain amount.
This case has not been challenged, but Sleeth says, “The scenario has all of the classic signs of what could make for a dispute.”
The fourth rule is exemplified by the case of author Tom Clancy, who was worth $80 million dollars when he died in 2013. The case was still prominent in the courts in 2016. Clancy had an estate plan for dividing the money among his second wife and his two sets of children. He also stipulated who should pay the taxes on the inheritance.
Shortly before he died, he signed an ambiguous codicil to the will, which led the courts to redistribute the multimillion-dollar tax bill among the children.
“The moral of the story is that estate planners need to be very careful about language that could arguably be construed as ambiguous,” Sleeth warns. “With an estate in the tens of millions, it was almost certain that all of the parties involved in Clancy’s estate would retain legal counsel who would pore over each word in his estate plan to seize on any ambiguity that could benefit their clients.”
Robin Williams’ estate ended up with a similar problem when the heirs argued over some of his clothing.
Sleeth says he has handled a lot of not-so-famous cases, including one involving a widower in Virginia who wanted to disinherit his children, who were spread all over the country. But he waited until shortly before he died to change his will. The children challenged the change, saying he no longer had the mental capacity to make those decisions.
“That case took years to litigate,” says Sleeth. “He should have made the change as soon as he decided to disinherit them, and not waited.”
In some cases, people try to claim mom or dad verbally promised them something. These claims seldom hold up in court if challenged, Sleeth says.
If you are on the other side of the litigation, he says, file the challenge as quickly as possible. Many states put a time limit on the time for challenging a will or trust and in some cases it is as little as a few months.
“To avoid as many problems as possible, engage an estate planner or attorney who is experienced at dealing with these issues, and then listen to him or her,” Sleeth says.
