InsuranceNewsNet Magazine May 2010 : Page 16

FEATURE | THE LESSONS OF FAMOUSLY BAD ESTATE PLANNING Author Michael Crichton poses at The Peninsula Hotel in New York, Dec. 7, 2004 (AP Photo/Jim Cooper) trinket to remember Diana by and had the letter thrown out in court through what some said was a legal loophole. The judge decided that the executors’ discre- tion meant they were not obligated to give the godchildren anything.The por- tion of the estate each child would have received under the terms of the letter reportedly would have been valued at more than $150,000. “I think the point from this is that your intent needs to be incorporated into your will or trust and not placed into a sepa- rate document,” Mayoras said. “And if you are going to do a separate document, don’t use the word ‘discretion.’” The next step might not seem neces- sary to point out, but apparently it is: Tell someone where the estate planning documents are. When Florence “Flo-Jo” Joyner micHael cricHton did leave a will and also excluded any unborn children. This is a typical provision in a will for a high-net-worth man. Although, in an odd twist, Anna Nicole Smith used the same provision and specifically excluded “future children” from her will, leaving her estate to her recently deceased son and disinheriting her 5-month-old daugh- ter. A judge eventually straightened that out—but at an expense to the estate. Both cases illustrate the importance of updating a will. When Crichton died of throat cancer, his fifth wife was six months pregnant and his will disinher- ited that child. “This highlights the importance of updating your estate planning docu- ments,” said Mayoras, who co-authored the book Trial & Heirs: Famous For- tune Fights. “You do not even need to wait until the child is born. It should be done as soon as a life event happens, whether it is starting a business or filing for divorce. Do not wait till the divorce is final.” Also, no shortcuts. The updating should be done in the will or trust doc- ument itself rather than in a letter of wishes. Although some defend the valid- ity of accompanying letters, the case of PrinceSS diana shows why they might not be the strongest tool in the estate planning shed. 16 InsuranceNewsNet Magazine May 2010 Olympic gold medalist Florence Griffith Joyner, center left, is applauded by President Pres. Ronald Reagan (AP Photo/Scott Stewart) After Princess Di died in a car crash on Aug. 31, 1997, a letter of wishes was discovered in her estate planning doc- uments that called for a quarter of her personal possessions to be distributed to her 17 godchildren, at the executors’ dis- cretion. The executors, Diana’s mother and sister, instead gave each godchild a died unexpectedly at age 38, her husband could not find her will, which fueled a family feud. After years of fighting, the court appointed a neutral executor who settled the estate four years after Joyner’s death. “The courts always, always want an original,” Mayoras said. “There could

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