You may not know it, but this week is National Estate Planning Awareness Week. I know, you’re devastated that you didn’t know this earlier. For those of you who are unfamiliar with this wonderfully exciting (!) week, a little history: Congress decided in 2008 to designate the third week of October as National Estate Planning Awareness Week in order to help bring attention to the fact that almost 120 million (yes, you read that right) people in the United States do not have an estate plan. Yes, Congress actually passed something. In 2008. (Read it here if you don’t believe me: https://www.govtrack.us/congress/bills/110/hres1499/text.) That means there a large number of people for whom the laws of their state of residence will largely dictate what happens to their estate. For anyone with a blended family, partners to whom they are not married, friends who are closer than family, or even just someone with an opinion on who should get what when they are gone, this can be a big problem. And one easily solved with a will.
However, a will to distribute your estate to your loved ones (and not the loved ones the state thinks you should have) is just one aspect of a robust estate plan. Having a complete will is a good first step. But you haven’t landed the hole-in-one yet. Today, most estates would greatly benefit from some sort of trust, the most common of which is a revocable (living) trust. This allows your assets to be transferred to your heirs without going through probate, which can be a long, complex and expensive process for those you leave behind. A thorough estate plan can also help you to plan for estate taxes. Even being wealthy and famous is no guarantee that someone has a good estate plan. Take the example of Lauren Bacall.
Noted Hollywood actress and style icon Lauren Bacall passed away this August. The world lost an accomplished legend, as evidenced by a 50-year career, marriages to Humphrey Bogart and Jason Robards, a tumultuous affair with Frank Sinatra, an Oscar nomination after 50 years (for The Mirror Has Two Faces – no comment), and – most importantly – a 24-hour movie marathon on TMC. But despite her wonderful outspokenness, Bacall did not seem to have a particularly thorough estate plan.
It has been widely reported that Bacall’s jewelry and art collection is to be auctioned off by Bonham’s in New York City. Because these are valuable pieces with both sentimental as well as significant monetary value, it can only be assumed that somewhere along the way, Ms. Bacall’s estate plan fell short. There does not appear to be an existing trust to hold or manage her assets, so the auction is scheduled to be held in March 2015, most likely to generate funds to pay the heirs as well as estate taxes. Surely Ms. Bacall’s children would have liked to have retained at least some of the 700 piece collection, which includes pieces by Picasso, Henry Moore and Hockney. (Interested in the auction? Details can be found here: http://www.bonhams.com/press_release/17636/) Alas, this is not to be due to incomplete or just plain bad estate planning. No birdies or holes-in-one here. This estate plan is a bogey all the way. And not the good kind. Don’t bogey your estate plan. See an estate planning attorney today.