This is the second in our “Celebrity Fail Series” that talks about how celebrities failed to do the proper planning for their estates. Besides having some great entertainment value, there are some important lessons that can be learned from some of the most recognized celebrities.
It also demonstrates that effective estate planning isn’t about having the most fame or money, it’s about understanding how to “execute your wishes” when you are gone…and protect your loved ones in the process. Since often times we envy celebrities, I want to point out that they, too, make mistakes when it comes to planning for their estates.
Why Focus on Celebrities?
Sharing how some of these celebrities failed to get things in order might help you see the importance of having your estate plan done, regardless of your wealth or status in society. I hope you can learn from these celebrity fails and have a little fun seeing that things aren’t always as they seem…but can be easily fixed when you know what to do when it comes to your estate.
Much of the information on these celebrities came from the writers at WealthManagement.com. They put together a great series showing some of the primary issues that each of these celebrities missed along the way. Hopefully you can learn from their fails and strengthen your own plan so you have greater peace of mind and NO.MORE.TEARS.
FAIL #2...Frank Sinatra, Jr.
Let’s take a look into the Estate “fail” of one of the most iconic singers in history, Frank Sinatra, Jr. He was the son of the famous singer Frank Sinatra. Frank Jr. passed away in March of 2016 and at the time of his death was in the middle of some interesting and complex issues with regard to his estate. His career started in his teens and he went on to become an iconic song writer, singer, and performer. To learn more about his life and his incredible successes, check him out on Wikipedia.
When it came to his Estate Plan Fail, his was one of complexity. At the time of his death, his ex-wife Cynthia had filed for divorce and the two were locked in litigation. There were multiple complexities to this situation since they were not officially divorced but had been separated for some time. Below is how WealthManagement.com describes Frank Sinatra Jr.’s situation…
“The couple originally divorced in 2001 but continued to live together. They even purchased a home together after their separation. Sinatra Jr. also had been ordered to pay Cynthia $5,000 a month in spousal support in the divorce decree. While this decree only required the support to continue for 24 months, Sinatra Jr. paid for almost 10 years. Cynthia also claimed that Sinatra Jr. called her his wife at social events.
All this apparently led Cynthia to believe the two were in a common law marriage. In 2013, when Sinatra Jr.’s monetary support for Cynthia ceased when he apparently ran low on money, she filed for divorce again. Sinatra Jr. claimed that the two, while close, were not in a common law marriage.
Despite his protest, a Texas district judge awarded Cynthia the second divorce. This judgment included a $500,000 equalization payment, a share of his property, and another $5,000 per month in spousal support. Sinatra Jr. appealed the judgment, and appeal that was pending at the time of his death. However, the appellate court reversed the trial court. In its decision, the appellate court was persuaded by the facts that the couple filed separate tax returns, listed themselves as single tenants in common for the house they purchased, and that Sinatra Jr. labeled Cynthia as his ex-spouse in tax returns. The court also noted that a common law marriage requires a specific and mutual agreement under Texas law.
According to estate planning attorney Will Sleeth, Sinatra Jr. could have avoided this mess in large part by having been more careful with is decision and actions (chiefly by consulting with and listening to his attorney). Many states don’t recognize common law marriage, but in those states that do, people need to be extremely careful that their actions don’t give their lover a basis to claim that the parties had a common law marriage.”
As you can see, it can get quite messy when you don’t plan. And even when you think you might have executed the proper documents or are doing things that would be viewed differently, the courts can still give you a different verdict. One key lesson we can learn from this story is that “how you act” can significantly impact what the courts decide. Just because you say you are doing something might not be enough if you are acting in a different way.
In the case of Frank Sinatra, Jr. there were several things he could have done to help prevent Cynthia from pursuing legal action. If he had talked to an estate planning attorney, they could have advised him on three key things.
1
His Living Situation
This was problematic since it allowed Cynthia to claim a common law relationship. If you divorcing, then it is better to “act divorced” with regard to living situations and other activities. Don’t confuse people (and the courts) with your living arrangements.
2
His Acquisitions
Purchasing property together when you are divorced or separated is probably not such a good idea unless it is put into a structure that makes it very clear this is a business arrangement as opposed to a personal arrangement.
3
Do What the Court Says
It’s important to follow the verdict and decisions of the court. In the case of Sinatra, Jr paying spousal support, he continued this for another 8 years past what was required. This can mislead judges as to intent of what you were doing as opposed to what you intended to do.
What to do next...
Take a look at your own situation and ask yourself if you are acting in a way to enable a judge to decide in your favor if there was some sort of disagreement or litigation pending. If not, change the way you act according to your estate plan. If you do not, either revise your actions or revise your plan. Sit down with your estate planning attorney and review where you are in life and compare your actions to your plan.
If they aren’t in alignment, talk to your attorney and develop a plan to get things fixed. If Frank Sinatra, Jr. had done this he could have avoided a lot of litigation and stress for everyone. I guarantee that when you have things in your life in alignment with your estate plan, you will find it much easier to have your plan executed the way you want and to leave a legacy to your loved ones by having things well documented and your wishes captured. It may be one of the most important things you can do for your loved ones once you are gone. Don’t be like Frank Sinatra Jr.…act the way you plan. When you do this, you will have NO.MORE.TEARS.