Probate records were recently filed showing that Winehouse died intestate, meaning without a valid will. The estate value is listed as £4,257,580 (worth about $6.7 million U.S.) in total assets, but taxes and other debts reduce the value to £2,944,554, or $4.66 million, U.S. Many believed her estate would be worth much more, perhaps as high as $15 to $20 million.
But, let’s not jump to conclusions so quickly. The assets passing through probate court are those left in her individual name when she died. So anything held jointly with someone else, or that had a beneficiary designation (like a life insurance policy), would pass outside of probate, directly to the other person. Also, if Winehouse had a trust — which is unlikely, considering she didn’t have a will — anything held in the trust would also avoid probate. None of these types of assets would be included in her estate value as listed in the probate documents.
What of her ex-husband, Fielder-Civil, who has been serving a lengthy jail sentence for burglary related to his drug addiction? As an ex-spouse, he gets nothing. Some have speculated that Winehouse still loved him and would have left him something if she had a will. Whether that’s true or not, it doesn’t matter at this point, because there is no will. Did Winehouse want her older brother, Alex, to inherit anything? He doesn’t, because she had no will. And at this point, who Winehouse wanted to receive her assets doesn't matter.
Instead of money passing to her brother or to her ex-husband, it will all go to Winehouse’s parents, Mitch and Janis. Mitch is the estate administrator, according to the probate documents. He will have to worry about estate taxes, probate court, and trying to make sense of her affairs without the benefit of any advance legal planning.
It’s too bad that the earlier reports of Winehouse having done proper estate planning have proven to be inaccurate. We previously applauded the foresight that a 27-year old would have had in updating her will after her divorce. By having no will at all, despite earning millions of dollars in her short career, Winehouse joined the dozens of other famous celebrities who procrastinated with their estate planning.
Most financial planners know how important estate planning is, and how dying intestate has many pitfalls, for celebrities and non-celebrities alike. Sharing stories like Amy Winehouse's tale of dying with millions, but no will, is a great way to remind clients of the need to do their estate planning.
Remind them that without a will, they have no say about who inherits their legacy. Do they really want to lose control over how and when their loved ones receive their inheritance? In addition, wealthier clients who procrastinate may lose the ability to do estate-tax avoidance planning. There's also the reality that, for many families, probate court can often be a breeding ground for a family fight ... especially when there was no will.
It doesn't cost much to have a will prepared the right way, by an experienced estate planning attorney. Obviously, most of your clients should have a living trust as well -- not to mention powers of attorney and end-of-life documents.
But too many people delay, find excuses to avoid estate planning, and turn a blind eye to the reality that they owe it to their children and grandchildren to put their affairs in order. Studies show that as many as two-thirds of adults in our country don't even have a will.
You can use celebrity stories to remind your clients and prospects of why they need to do their estate planning. It will help strengthen your client relationships, showing them that you care about them and their families as people -- and not just their money. If you want help incorporating celebrity-based, estate planning stories into your practice, we have tools for financial professionals to do exactly that ... helping their clients and growing their businesses at the same time. Click here to learn more.