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Avoid these estate planning mistakes celebrities made

With all the resources at the disposal of celebrities, you would think they would have excellent legal guidance concerning estate plans. Unfortunately, many of the rich and famous do not value the importance of making these plans.

Their lack of understanding and proper preparation have led to costly mistakes, court battles and ill-chosen beneficiaries. Learn from their mistakes so you can avoid the same consequences.

Wills

Wills may seem like simple, straightforward documents, but it is exactly that thinking that leads to numerous mistakes. Some celebrities, such as Prince, did not even make a will. This means the courts get to decide what happens to his estate. More often, the will is outdated and does not provide for children, divorces or marriages that come after the creation of the will. Make sure your will accounts for possible future changes, and update it once those changes come to pass. Also, include tangible personal property, such as collections and heirlooms, to avoid family battles like that of Robin Williams's survivors.

A less common mistake is hiding the will, as one former Olympian did. You or the executor of your estate should keep the original document, tell your attorney where it is and give him or her a copy, as well.

Trusts

Celebrities have high-worth, complicated estates. A will is not enough to cover all their assets and wishes. Establishing a trust is best when there is considerable money and property. The celebrities who failed to establish trusts did not understand their purpose. You can set rules regarding access and use of the funds to prevent mismanagement. You can also determine what happens to the money if the beneficiary passes away to avoid it going somewhere you do not want it to.

Another benefit of trusts is getting out of high taxes that can take a large chunk out of your estate. Not planning for taxes leaves less to your beneficiaries than you intended, or even nothing at all if you also leave significant debt behind.

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