Anna Nicole Smith’s mess of a will attracts the attention of clients ..
CHICAGO — The publicity surrounding the debacle of Anna Nicole Smith’s estate highlights the importance of careful estate planning, according to financial advisers, but the errors she made are quite common and are easily remedied.
Since the celebrity’s death at age 39 in February, advisers said, they have seen an increase in the number of clients calling with questions about will preparation.
It is common for clients to ignore estate-planning issues, and a case such as Ms. Smith’s gives advisers an opportunity to encourage their clients to take the appropriate steps, said Charlie Douglas, an attorney and certified financial planner at Strategic Stewardship Inc. in Atlanta.
“It’s a hot area, because this is a way for me to add value and differentiate myself and to help people,” he said. “I think if you can add value through an emotional connection by helping people plan around issues that are more than just money, you’ve got a client for life.”
Advisers who said they haven’t seen an increase in calls regarding wills intend to use this case to help prevent their clients from making the same mistakes that Ms. Smith did.
Although advisers don’t draft wills, it is incumbent upon them to make sure that their clients’ wills are updated regularly, particularly when a life-changing event occurs, advisers said.
Contingent heirs
“The best advisers, at the top of their game, who are truly professional, are dedicated to doing the right thing for their client,” said Ruth L. Forehand, a CFP and vice president of wealth management at Financial Advisory Consultants LLC in Naples, Fla. “That should not be confused with someone who doesn’t have credentials and is working on a transactional basis.”
Ms. Forehand said that Ms. Smith’s will could have been fixed easily had the former Playboy playmate updated it to include her daughter, Dannielynn, now seven months old. Ms. Smith’s will named her son, Daniel Wayne Smith, as the sole heir, but he died last September.
Surprisingly, her will stated that she “intentionally omitted to provide for my spouse and other heirs, including future spouses and children.”
That provision shocked many attorneys and advisers.
“What person would have ever excluded children born after the fact?” said Gary L. Flotron, president of the National Association of Estate Planners and Councils in Cleveland. “That’s so stupid.”
Clients should always include contingent heirs, said F. John Deyeso, a CFP with financial filosophy, a New York firm.
Emotional issue
Advisers said that it is more difficult to get younger clients to plan their estates, said James W. Zeberlein Jr., a CFP with Z Financial Planning LLC in Salt Lake City.
“It’s so emotional, primarily for younger folks. It’s not as difficult for older folks, because they’ve had friends and family die, and have seen fights in those families,” Mr. Zeberlein said.
“This kind of news can only help people, and young people really need to start looking at estate planning seriously,” said Michael Sandberg, senior vice president of Newbridge Financial Services Group Inc. in Fort Lauderdale, Fla.
Even affluent clients and high-net-worth business clients often don’t do proper estate planning, according to Stacy Francis, a financial adviser with Francis Financial Inc. in New York.
“You would think that affluent clients would know the importance of having their will in order,” she said. “People don’t want to face the fact that they’ll die, but that’s the one thing we know will happen.”
While it was determined that photographer Larry Birkhead is Dannielynn’s father, many other issues remain, including who will inherit Ms. Smith’s estate and what will be the outcome of her decade-long legal battle against the family of her late husband, J. Howard Marshall, for up to $500 million from his estate. Mr. Marshall died at age 90 in 1995.
At a hearing Friday, a resolution was apparently reached regarding Dannielynn’s custody. Ms. Smith’s estranged mother, Virgie Arthur, was fighting for guranteed visitation rights.
Mr. Birkhead said he couldn’t disclose what happened, but said he had a good day in court.
Advisers said that a custody battle could have been avoided had Ms. Smith indicated her wishes in her will.
Ironically, her estate may not be worth much — probably as little as $100,000 and no more than $1 million, according to Horace Cooper, an assistant professor of law at George Mason University in Fairfax, Va. Ms. Smith filed for bankruptcy in 2000 and had borrowed money, based on the expectation that she would receive her inheritance from Mr. Marshall’s estate, Mr. Cooper noted.
“People were accepting promises [that she’d receive the inheritance] in exchange for giving her goods and services,” Mr. Cooper said.
It is possible that Dannielynn will lose more of her mother’s estate to court costs, he said.
“This child will have to sue on her own behalf to get her mother’s estate,” Mr. Cooper said, adding that Dannielynn could end up in debt if she doesn’t win money from Mr. Marshall’s estate and if Ms. Smith’s attorneys continue to borrow money.
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Anna Nicole: A Model for Bad Estate Planning
Today’s posting is courtesy of Ohio attorney Ted Gudorf, whose practice is limited to Estate Planning and his comments about Anna Nicole are remarkable for their timeliness and accuracy. It’s a lesson worth learning. It is quite surprising how someone so rich and famous could foul things up so badly.
Anna Nicole Smith rose to fame as a model for Guess Jeans and Playboy magazine. Now, her death has given her newfound fame as a great model for terrible estate planning.
Forget the fact that you can’t visit a supermarket without seeing gossip about her life and death. When push comes to shove, Anna Nicole, the human being, was a single mother who was embroiled in a bitter legal battle over the estate of her ex-husband, and was suffering from the sudden and unexpected death of her son just three days after the birth of her daughter.
When you peel away the celebrity from the person, her legal situation becomes nearly as tragic as her life. She sadly didn’t take proper measures to protect her baby daughter from opportunists finagling to acquire custody in order to have access to her inheritance.
The teachings of Anna Nicole
What can we learn from Anna Nicole’s tragedy?
Lesson 1: Keep your estate plan current.
Anna Nicole’s will was prepared in 2001, before she ever conceived of daughter, Dannielynn, both figuratively and physically. The will leaves her entire estate to her son, Daniel, and specifically disinherits any offspring born after the will was signed. Because she never updated the will after her son died and her daughter was born, the document is invalid and needs to go to probate.
Lesson 2: Hire an experienced attorney.
A licensed attorney in the State of California prepared Smith’s will. But did he have extensive probate experience? A qualified and savvy attorney would have had the foresight to protect her in the event that she survived her son.
Lesson 3: Select a guardian.
It’s always a hard decision to make, because no one can raise your children as well as you can. But it’s imperative to select someone. You can always change it later. If Anna Nicole had named her daughter’s guardian, the lengthy legal battle for custody that is sure to ensue could have been avoided.
Lesson 4: Plan for death-related items.
Very few people enjoy planning for their deaths. Especially if they’re young and beautiful, like Anna Nicole. But if she had taken the time to prepare burial plans, the first phase of her legal battles could have been avoided. (Her mother wanted her buried in Texas, while Stern claimed that she wanted to be buried next to her son in the Bahamas, since she had purchased a double cemetery plot.)
Anna Nicole’s story is as chaotic in death as it was in her life. She leaves behind a rich legacy of what not to do when preparing an estate plan. Few lives are as complicated than the larger-than-life existence that she led. But by studying her mistakes, you can protect yourself from similar missteps by letting that model be a role model to avoid.
http://ohiolemonlaw.blogspot.com/2007/04/anna-nicole-model-for-bad-estate.html
could she have excluded Dannielynn becaue she knew Larry would get custody of her at some time?