An interview with Danielle Mayoras, co-author of "Trial & Heirs: Famous Fortune Fights"
What do the estate planning mistakes and missteps of celebrities have to do with you? Everything, insist legacy experts Danielle and Andy Mayoras, who use the real-life errors of the rich and famous as teachable moments to show families and investors how to avoid costly estate planning errors.
The Mayorases chronicle the juiciest, most scandalous, and most confounding celebrity estate planning imbroglios on their website and in their acclaimed book, Trial & Heirs: Famous Fortune Fights, which has been updated and expanded for its second edition.
Celebrity courtroom clashes and combative estate contests make for irresistible reading, but beyond the tantalizing tabloid nature of these stories, the Mayorases hope that households will take key estate planning lessons and basic concepts to heart to avoid similar clashes within their own families.
“These are not just celebrity issues,” Danielle Mayoras told Millionaire Corner. “People may think that because of the wealth involved, celebrity cases don’t apply to them. But it’s not about the numbers. It’s about the emotional pain (estate planning errors can inflict). Celebrity case studies humanize some of these issues."
A recent case in point: Whitney Houston. Recently, Houston’s mother Cissy and sister-in-law Marion filed a request in court to change the terms of Whitney’s will. That will had created a “testamentary trust” for daughter Bobbi Kristina, which provides that she will receive 10 percent of the estate when she turns 21, another one-sixth at age 25 and the balance at age 30. Bobbi Kristina is the only heir.
The petition to reform the testamentary trust claims that the distributions to Bobbi Kristina “would likely directly conflict with and cause the opposite of (Whitney’s) intent to provide long-term financial security and protection for her child.” In addition to tabloid reports about substance abuse, Cissy and Marion are further concerned that Bobbi Kristina, 19, is “a highly visible target for those who would exert undue influence over her inheritance….”
One lesson to be learned from the Houston case, Mayoras said, “is to update your documents and use a revocable living trust.” Houston did not when she prepared her will in 1993, “which is pretty mindboggling considering what her assets were,” Mayoras said. “At one point she had the biggest recording contract in history.”
A will, Mayoras said, goes through probate court, and so becomes public record. “Now, everyone knows Whitney Houston’s business,” she said. In addition, the probate court process is time-consuming, expensive, and ripe for family conflict. With a living trust, probate court could have been avoided and the contents of the will kept private.
One lesson Mayoras cannot stress enough is to work with an experienced estate planning attorney. Often times, she said, people will use their divorce attorney or even a lawyer who helped them out with a traffic ticket. The sad and twisted case of Gary Coleman illustrates this basic concept. After preparing a will in 2005 that named his business manager as a beneficiary, he added a hand-written codicil that named his wife, Shannon Price, as beneficiary.
“We never like when people do hand-written wills unless it’s a dire emergency,” Mayoras said. “There will be questions over what the persona really wanted or whether he was being unduly influenced.” In the case of Coleman, those suspicions centered on his wife. Working with an experienced estate planning attorney would have avoided confusion as he or she would have had detailed notes on why changes to the will were made.
Sure enough, last May, a judge ruled the codicil invalid, citing Price’s spousal abuse and infidelity and rejecting her claims that she and Coleman were still, under Utah law, common law husband and wife despite being divorced.
Wills and other estate planning documents need to be updated after life events such as divorce, marriage or new children, Mayoras said.
A third recent case illustrates how fractious estate battles can be and highlights the importance of succession planning. The Archie comics empire has been rocked to its foundation by power struggles, exacerbated by lawsuits, between Jonathan Goldwater, the son of John L. Goldwater who was one of three founders of the company and who died in 2007, and Nancy Silberkleit, the widow of founder Louis Silberkleit’s son, Michael.
The two have engaged in behavior that would make Archie and the gang blush.
“The sad thing,” Mayoras said, is that many business owners fail to do their succession planning and don’t stop to think who would be good at running their company. When you don’t do proper planning, it’s a roll of the dice (whether people can get along).”
Mayoras urges people not to put off estate planning and rejects common rationalizations to procrastinate such as “Our family doesn’t earn enough money to necessitate estate planning” or “Our family gets along.”
“People wear rose-colored glasses,” Mayoras said. “You’re hoping for the best that kids will get along and that if something happened to you, it would bring everyone together. Stop wearing the rose-colored glasses. All too often, it just doesn’t happen.”
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.