You might think people at the top of their game in the entertainment business would also be savvy about estate planning. However, “regular folks” repeatedly see Hollywood stars making mistakes as big as their careers. A recent article from CNBC, “3 end-of-life money mistakes celebrities have made—and how you can avoid them,” says learning from these high-profile mistakes can help those not on the red carpet avoid making their own mistakes.
Aaron Carter died without a will. Not having a will is the biggest estate planning mistake, and it’s all too common. Young adults mistakenly believe they won’t need a will until later in life. When Carter died in 2022, he had no will, an 11-month-old son, and was engaged. In most states, when an unmarried person with a child dies without a will, the child becomes the sole heir. However, when the child is a minor, it gets complicated.
Because there was no will or trust, the court appointed a fiduciary to handle the estate. This person will be involved with Carter’s child’s life for years, until his child reaches legal age. With a will in place, Carter could have chosen who he would have wanted to take care of his finances and appoint a guardian for the child. A trust would have kept Carter’s estate out of the court system.
Kobe Bryant didn’t update his estate plan. Updating estate plans every few years or when trigger events occur is needed to avoid the issues faced by Bryant’s estate. He passed away in 2020, less than a year after his daughter was born. He did have an estate plan, but it was never updated, so Capri wasn’t included as a beneficiary of the estate. Bryant’s wife had to petition the court after he died so Capri would be added.
Any major life event warrants an estate plan update, including a will, trusts, and reviewing the names of beneficiaries on retirement or investment accounts and life insurance policies.
James Gandolfini’s estate skipped tax planning completely. Gandolfini had a will appropriately created, but didn’t incorporate any tax-saving estate planning tools. As a result, his estate paid an estimated $30 million in federal and estate taxes.
Failing to have tax planning as part of an estate, especially when the estate is sizable, leaves a significantly reduced estate to heirs. Family members faced with an overwhelming tax burden may have to sell assets to pay the taxes. Even with federal estate taxes at an all-time high, non-celebrity heirs are often surprised to learn they are responsible for taxes on inherited retirement accounts like 401(k)s and IRAs. Learning more about putting your home in a trust is essential, as it can help reduce the tax burden on your heirs and protect them from having to sell valuable assets just to cover estate or inheritance taxes.
Estate planning and tax planning aren’t just for wealthy celebrities. Regular folks with regular estates can leave more to their heirs than grandma’s old coffee pot if they consult with an estate planning attorney to protect their legacy, regardless of size.
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Reference: CNBC (April 20, 2025) “3 end-of-life money mistakes celebrities have made—and how you can avoid them”