The Cost of Not Having a Current Estate Plan

What did Heath Ledger, Princess Diana, and the singer Prince all have in common? Each of them died with a botched estate plan—or none at all—and they cost their families a fortune in money and grief as a result.

The shock of Heath Ledger’s death from a drug overdose in 2008 was compounded by the discovery that his will left nothing to his only child, Matilda. Heath had prepared his will before Matilda was born, and the Australian actor never updated the document to provide for her.

The implications were heartbreaking. Heath’s father would inherit the entire $16 million estate, but Matilda, who was only 2 at the time, would receive nothing. Then, in a surprising turn of events, Heath’s father decided to give the full estate to Matilda, ensuring that his granddaughter would be well provided for. Heath’s father had no obligation to do this. By updating his will when Matilda was born, Heath could have prevented the uncertainty and legal costs his oversight caused.

Princess Diana’s will was more up-to-date than Heath Ledger’s, but it contained a serious flaw. Diana placed too much faith in her executors to carry out her instructions. The will was accompanied by a “statement of wishes,” which said that three-fourths of her personal property should go to her sons, Prince William and Prince Harry, and rest to her 17 godchildren. (Personal property includes household items like clothes, silver, china, and furniture.)

The problem with using a “statement of wishes” is that it’s not legally enforceable. Knowing this, Diana’s executors gave the godchildren only one small trinket each, to the surprise and dismay of the children’s parents. For such a substantial bequest, Diana’s attorneys should have included the bequests of personal property in the will itself. Because a will is enforceable, the godchildren could then have sued if they didn’t receive their designated share.

Preparing an estate plan is much less expensive—financially and emotionally—than managing the fallout if something goes wrong.

Unlike Heath Ledger or Princess Diana, the singer Prince left behind no will at all. In the aftermath of his death in 2016, some 45 people came forward claiming to be heirs to his estate. One of them was a prison inmate who said he was Prince’s son (a DNA test proved otherwise).

A Minnesota judge has since determined that Prince’s $200 million estate should go to his sister and five half-siblings in equal shares. The other would-be inheritors were sent packing. But the judge has given the denied parties a year to appeal his decision, which means only more anxiety and legal expenses before anyone receives an inheritance.

Each of us can learn from the estate-planning mistakes of these celebrities. The problems they left behind can be easily avoided by taking five simple steps:

First, call an experienced estates and trusts attorney who will take steps to avoid a dispute after you are gone. Ideally, your attorney should be a fellow member of the LGBT community who understands your concerns on a personal level.

Second, have him prepare an estate plan that takes your circumstances and family dynamics into account. A will or trust should be the backbone of your plan, but other documents, like a durable power of attorney and advance healthcare directive are equally important.

Third, with the attorney’s guidance, follow up on other items, like updating the beneficiaries named on your life insurance policies and retirement accounts. It is often essential that items like these be taken care of in order for an estate plan to be fully effective.

Fourth, keep everything up to date. Call your lawyer if there is anyone new in your life, like a partner, spouse, or child, or if someone named in your plan has died.

Finally, take comfort in knowing that a legal battle won’t be part of your legacy. Instead, your lifetime of accumulated wealth will pass efficiently to the people you care about most.