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A lesson in legacy estate planning from Hollywood: do you leave your fortune to your kids, or not?

By: Anthony Cetrangelo, Jr.

It may not be tabloid worthy, but it isn’t very often that the public gets to hear about how a celebrity intends to leave their fortune and legacy, before they pass away. This information is notoriously very private, and the public doesn’t get much insight into the stars estate planning intent, until after the celebrity has passed away. This was the case with the following stars that passed away, without a Last Will & Testament and/or Trust; music and pop stars Prince, Michael Jackson, Jimi Hendrix, Amy Winehouse, Tupac Shakur, Bob Marley; NFL star Quarterback, Steve McNair; movie star, James Dean; and legendary artist, Pablo Picasso.

Marie Osmond

There has been a lot of talk in the media about whether or not NBA star Kobe Bryant’s estate will pass intestate or testate. Earlier this year, Marie Osmond, known for being a former country singer, as a member of the Osmond Family, and currently for being a co-host on, “The Talk” made some statements to her CBS co-hosts that may have caught the public off guard, as she said:

I’m not leaving any money to my children,” Marie told her CBS co-hosts, adding, “Congratulations, kids.” and “My husband and I decided that…I think you do a great disservice to your children to just hand them a fortune because you take away the one most important gift you can give your children, and that’s the ability to work.” Marie Osmond

I have to commend Marie Osmond on her candor and bravery for publicly sharing her, and her husband’s estate planning goals for their children, because these statements could be interpreted as cold and cruel at first glance.

Why not leave the money to your children, and ensure that working is optional for survival and not mandatory?

Being an estate planning lawyer in Naples, Florida, my client’s often have the same perspective, as Marie Osmond. Clients’ worry that once their children find out that trusts have been set up for them, and that one day they will receive a fortune, the children will no longer have the “drive” to pursue their own endeavors in life; whether it is seeking a higher education to become a professional, follow their passions, start a family or create their own business. Some clients believe that it would actually be an injustice to their children, as giving them a fortune may inhibit their developments in life.

Other clients worry that by the time their adult children receive their massive fortune (if they didn’t already have knowledge of their Trust), it may be too disruptive to their children’s established lives, which they are accustomed too with their own families. They believe it may negatively hinder them more than help them, as the new fortune may abruptly change their family dynamic, spending habits, goals, careers, etc.

Sharon Osbourne and Sheryl Underwood

Sharon Osbourne and Sheryl Underwood, had opposite sentiments than Marie Osmond, on passing their legacies to future generations, as they stated:

Everybody is different, and I just know that my husband’s body of work that he’s written and kept us all in the lifestyle that we love, goes to my children and his name and likeness goes to my children,” she explained. “I don’t want somebody that never met my husband owning his name and likeness and selling t-shirts everywhere. No, it stays in the Osbourne family.” Sharon Osbourne

I think that when you come from a family of money, you raise your children to value money and understand money and because they were born into the family, they should have a healthy respect for money.” Sheryl Underwood

Who is correct here, Marie Osmond, Sharon Osbourne or Sheryl Underwood?

The answer is, they are all correct and it depends. Every family dynamic is unique and there is not a one size fits all estate plan for everyone. Estate plans have to be customized according to what matters and is the priority of the client.

Some clients are solely focused and minimizing estate taxes for the future generations, while others are more concerned with keeping assets out of probate court, protecting a child from their spending habit or shielding the money from a potential future divorce.

Trust options

Personally, a trust that I like to draft, meets in the middle of how Marie Osmond, Sharon Osbourne and Sheryl Underwood, feel about legacy planning for future generations. If a parent or grandparent, is concerned that a child will stop bettering themselves and be productive members of society, if they were to receive millions of dollars in a lump sum, than stipulations on receiving the money can be placed. A client can have trust provisions drafted that only allow for the trustee to make discretionary distributions of the trust money, pertaining to the child’s health, education, maintenance or support.

A client can also have trust provisions that make specific cash distributions contingent upon achieving certain milestones in life such as, buying a first home, getting married, successfully receiving an undergraduate degree, receiving a post-graduate degree, or becoming gainfully employed for five consecutive years in the field of their degree after graduating. The options can be as be as creative as the client desires and even utilized as a motivational tool. If my grandparents had a set up a trust for me, and stipulated that a specific cash distribution of $250,000.00 was contingent on Anthony Cetrangelo receiving a juris doctorate degree before age 35, I’d be very motivated, rather than inhibited, to get the show on the road.

If you would like to learn more about setting up your estate plan or making changes to your existing estate plan, please feel free to contact me at anthony.cetrangelo@henlaw.com or give me a call on my direct office phone number at 239-344-1358.