Estate Planning Lessons, Courtesy of James Brown
One of the most notorious cases of celebrity estate plans gone awry has to be the one that James Brown left behind. Eight years after the famous soul singer's death, Brown's estate continues to feature constant battles between potential heirs over the wishes of the deceased. Everyone else, including ordinary families, can learn from these problems, and craft an estate plan that doesn't leave you spinning in your grave.
It's not that Brown was cavalier with his estate plan. In fact, it was just the opposite. He sat down with an estate-planning attorney and together they drafted what many consider to be a clear plan for what would happen with his assets once he passed away. For example, because he wanted to secure his legacy, and because he hadn't attended school past seventh grade, he set aside most of his estate's $86 million in assets to be used to create a scholarship fund for disadvantaged children.
Brown only put aside a few million for some family members' educations and other expenses, and he left behind a few personal mementos for his family. Otherwise, however, he cut his children and a common-law wife entirely out of his will. That decision has led to eight full years (so far) of expensive litigation, and the lawsuits show no signs of stopping anytime soon. And all of this litigation should serve as a lesson to those who don't have $86 million, or even $86,000. Estate plans should take into account the potential that unhappy heirs might waste time and money challenging them.
For example, one of the most common arguments used by James Brown's heirs is that he suffered from diminished mental capacity and, based on that, the will should be considered invalid. Some heirs also claim that years of addiction had left Brown vulnerable to the manipulations of financial advisors.
These types of complaints about wills are becoming more common as people live longer and longer, and this is a very strong argument for drafting a will very early in your life, and not waiting until questions of incapacity have more potential validity. By crafting your will early on, it makes such claims much more difficult to prove. Brown drew up his final will six years before he passed away, at age 67. While that would seem a sufficient period of time in most cases, it depends on the mental capacity of the specific person whose estate is being challenged.
You can also avoid these types of challenges from heirs by not making sudden shifts in your will, which makes the potential for a claim of "outside influence" seem like more of a possibility. If you do make a shift in the provisions of your will, be sure to create a trail of paperwork that details your entire thought processes and lays out your decision-making process. It's best if the paperwork goes back a longer time.
Another thing to keep in mind is that wills are often challenged when the decedent decides to treat each of their children entirely differently or cut them out of their estate entirely. In Brown's case, he had an $86 million estate, but left only personal items to his children. While that choice is perfectly acceptable, such a will is more likely to be disputed by heirs. One way to avoid this is to create a no-contest clause in your will, which would say that any heir who challenges the will gets nothing at all. Brown did have such a clause in his will, but it can only work when heirs have something to lose. Brown's mistake was in not leaving them anything substantial enough to make it worthwhile to avoid a court fight.
If he had left his common-law wife and his children a relatively small portion of his $86 million fortune – say, $500,000 each – the poor children may have gotten their scholarships, because they may have decided that half a million was something they didn't want to lose.
Sometimes, if you want to create a will that won't be challenged by your heirs after you're gone, you have to think outside the box, and consider their reaction to certain provisions. A strong estate planner can help you avoid creating problems later on.