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Estate planning hits and misses; lessons learned from the stars

Residents of Clark County are no strangers to the goings on of celebrities and business moguls. When well-known people die, news reports abound concerning how their fortunes will be shared. Whether tragedy, illness or old age cause the loss, people find it fascinating to learn of the wills and estates of the rich and famous.

What's interesting, however, is that celebrities don't always have it together when it comes to providing for their heirs. Average people living in Nevada can learn some valuable lessons from the publicized mistakes or poor choices of celebrities.

A child's age is a very important consideration. An initial plan that assumes their capability to manage money effectively at a specific age should be reviewed as they mature. A guardian or trust can protect an inheritance for minor children. Without proper provisions, a parent's unexpected death can hand over wealth before the child is ready to manage it. James Gandolfini died at 51, and his daughter will inherit his fortune when she reaches 21. There are some that question whether she will be ready for the financial responsibility.

Keeping assets private can be important. The recent deaths of Heath Ledger, Mr. Gandolfini and Philip Seymour Hoffman put their wills in probate -- a public, time-consuming circumstance that isn't necessary. Wealth placed in a trust is distributed privately, with a simple will bequeathing everything to an appropriate trust.

Marriage does matter when it comes to inheritance. Mr. Hoffman willed $35 million to his partner. They weren't married, so taxes will devour about $15 million of the estate. Spouses inherit tax-free. Mr. Gandolfini willed much of his wealth to his sister, but also provided the Internal Revenue Service with $30 million of his $70 million estate.

Most people don't have vast fortunes to consider when planning how their loved ones will benefit after they are gone. The potential inheritance issues, however, are the same regardless of dollar amounts. Evaluating your wishes and legal documents on a regular basis can ensure your legacy is handled in the best interests of your heirs.

Source: Forbes, "7 Tips From Philip Seymour Hoffman, Gandolfini, & Other Celeb Estates" Robert W. Wood, Feb. 23, 2014

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