Horror stories abound about all the ways estate plans can go awry. Here is another one, this time featuring abandonment as the main character.
John Singleton, Celebrated Movie Director
Back in 1991, John Singleton, a previously unknown 23-year-old Hollywood film director and producer, hit the big time with his debut trailblazing movie “Boyz N the Hood.” He went on to direct, write, produce or act in a string of popular movies. He also, in 1993, made his Last Will and Testament.
Fast Forward 26 Years
In 2019, Singleton suffered a massive stroke and was put on life support at Cedars-Sinai Medical Center in Los Angeles. His family discovered, much to their horror, that he had never signed an advance directive or a health care power of attorney. Consequently, no one knew his wishes regarding medical care and no one had the authority to speak on his behalf. A family battle ensued.
When Singleton ultimately died 13 days later, the family also discovered that he had never updated his 1993 will. The problem? In the intervening 26 years, he had fathered six additional children by several different women. With his $38 million estate at stake, the family battle turned into an all-out war.
The 1993 will named the only child Singleton had at the time. But California law allows children born after the signing of a will to inherit equally with any child or children named in a will. In this case, however, there were also paternity issues surrounding at least two of Singleton’s after-born children. This resulted in still more lengthy, expensive court battles.
The Moral Of This Story
The moral of the John Singleton story is clear: don’t abandon your estate plan once you begin setting it up. An estate plan is not a one-and-done undertaking. As you and your situation change, you need to update your estate planning documents to reflect those changes. An abandoned estate plan can tear your family apart.
In addition, while your Last Will and Testament may be your estate plan’s foundation document, it is not the only document you need. As your wealth increases, you may well need to add trusts to benefit your various family members.
As for protecting yourself, you need to execute an advance directive that states your wishes regarding the types of medical care you want and don’t want if, like Singleton, you become too ill or incapacitated to state them yourself. In addition, you should execute a health care power of attorney naming the person you want to make health care decisions for you in the event you cannot make them yourself.
Where the DST Comes In
You likely know that a Deferred Sales Trust (DST) allows you to defer capital gains taxes when you sell a highly appreciated asset. But did you know that a DST also makes an excellent estate planning tool? It’s true. A DST can not only help you avoid probate, but also help you minimize estate and gift taxes. In addition, your DST will not compete with any charitable trust you may wish to establish.
Want to know more? Contact Reef Point today. We’ll be happy to answer all your estate planning and other questions.