In our last post, we began discussing various estate planning lessons gleaned from the mistakes and situations of various celebrities. As we've noted, procrastinating on estate planning can cause problems down the road, as can failure to appoint powers of attorney.
Updating wills and trusts and other legal documents is another very important lesson we learn from celebrity mistakes. Michael Crichton, for instance, died of throat cancer when his wife was six months pregnant. In his will, Crichton included a term excluding any new children, which led to his adult daughter from a previous marriage and his wife battling in court over whether the child should be allowed to inherit. Ultimately, the judge decided in favor of the wife. Updating his will would have prevented the whole thing though.
Anybody who has had a major life event-such as birth, divorce, a new child, a new business or a move between states-take place since they created or updated their will and other legal documents should go back and update them again. In terms of beneficiary designations, some states automatically revoke a pre-divorce decree designation naming the former spouse as beneficiary. These, however, cannot be relied on to complete update things, particularly if no alternate beneficiary is listed or if the alternate beneficiary is the person's estate.
Finally, it is important to remember to communicate with one's loved ones and family members about where the estate planning documents are located and what they have to say, generally speaking. This gives everyone peace of mind and prepares the family for any less than pleasant news.
Source: Forbes, "Etta James, Others Remind of Need for Estate Planning in 2012," January 24, 2012.