(florida today) We are counting down the last few days of 2019 and as we do, we often reflect on those we have lost. From beloved actors like Doris Day and Tim Conway to those I am too old to know, like Disney star Cameron Boyce and rapper Juice WRLD. As an estate planner, I cannot help but consider the lessons to be learned. In years past, the deaths of Prince and Aretha Franklin revealed the dangers of an incomplete estate plan. We also saw the potential pitfalls of a will-based plan upon the death of gifted actor Philip Seymour Hoffman.
Mr. Hoffman died of a drug overdose in 2014. Upon reviewing his will, two problems immediately became apparent. First: His will was written by an attorney who specialized in real estate, who was not familiar with New York’s tax laws. Second: The will was 10 years old and inadvertently excluded Mr. Hoffman’s second child, born after the will was signed. Mr. Hoffman’s estate was rumored to be around $35 million. The will left the entire estate to his longtime partner/mother of his children, Marianne O’Donnell. An attorney who specializes in estate planning would likely have identified that the state of New York does not recognize common law marriages and would have included provisions within Mr. Hoffman’s will to protect O’Donnell from massive state and federal estate taxes. Unfortunately, Mr. Hoffman’s attorney did not, and as a result, Mr. Hoffman’s loved ones may lose one-third to half of the entire estate to taxes. As an estate planner, it saddens me to think of how easily this loss could have been mitigated or avoided.
Ric Ocasek, lead singer for the popular '80s band The Cars, died this past September. Anyone growing up in the '80s will remember when the skinny lead singer married supermodel Paulina Porizkova. Their marriage legally lasted 30 years, until Ric’s death. Unfortunately, Ric and Paulina had been separated for three years. Weeks before he died, Ocasek created a new will which stated: "I have made no provision for my wife Paulina Porizkova as we are in the process of divorcing.” The will also stated: “Even if I should die before our divorce is final ... Paulina is not entitled to any elective share ... because she has abandoned me.”
By adjusting his estate plan to specifically disinherit his wife, Ocasek avoided a scenario wherein his estranged wife would receive the entirety of his estate.
Ocasek is fortunate that the aforementioned provisions may be enough in New York to disinherit Paulina. In Florida, Ocasek’s language would not result in complete disinheritance, because of the application of the elective share. Florida’s elective share provides a surviving spouse a mandatory minimum share of their deceased spouse’s estate, regardless of what the estate planning documents say. Generally, the elective share provides no less than 30% of the deceased spouse’s assets. Entitlement to the elective share continues until a final judgment of divorce is entered.
Although you cannot completely disinherit a soon-to-be former spouse prior to legally finalizing your divorce in Florida, planning opportunities exist to ensure you are in control of the final disposition of your property. If done properly, an elective share trust allows you to satisfy the elective share rights of a spouse, while retaining the right to direct distribution of any unused amounts upon your spouse’s death. This can be especially useful in a second marriage where there are separate children.
While enjoying time with your family over the holidays, contemplate whether your estate plan accurately reflects your wishes and ensures your loved ones will be protected. Securing a future for your loved ones is a gift that is hard to top.
