Estate planning mistakes Nevada residents should avoid

On Behalf of | Jan 5, 2017 | Estate Planning

While many people aim to emulate celebrities, one thing that they may not want to copy are the estate planning errors of Prince and Whitney Houston. Both of them had large fortunes that may not have been distributed according to their wishes due to a failure to plan ahead.

In Prince’s case, he made arguably the largest error possible, which was to not have created an estate plan at all. Due to his choice to not prepare a will, his assets were distributed among his family members based on state intestacy laws. If there were any friends or charities that he would have liked to have his money go to, they will not receive it.

Whitney Houston, on the other hand, did have a will, but she had not updated it for decades. She had it drawn up in 1993, and her fortune grew immensely between that time and the time of her death. When her daughter was given access to the 10 percent of Houston’s fortune, which amounted to $2 million, it appears she was not able to handle it responsibly, and she died a few years later.

There are a number of types of trusts that will give people control over how their assets should be distributed upon their death. Trusts can also be useful if there is a concern that a potential heir would squander a lump sum that was inherited under a will. Instead, an estate planning attorney might recommend language that would time distributions to the achievement of certain specified milestones.