POWER POINTS
+ Though her death was unexpected, Joan Rivers was prepared and took the responsible step of having a current estate plan.
+ Your estate plan can include your wishes for your health, assets, funeral or burial, loved ones and even your pets.
+ Starting a conversation with your estate planning attorney is the first step to understanding your estate planning options.
Although Joan Rivers was 81 years old, her death on September 4, 2014, was unexpected. Since life rarely goes as planned, it is important for all of us to be prepared for the unexpected. As we have seen with several celebrity estates in the past few years, wealth and fame do not always equate to proper planning. However, Rivers died with a recent Will and, through proper planning, took advantage of the estate planning benefits available to all of us.
Privacy
Although her Will was filed with the New York State Surrogate’s Court and is now a public document, the Trust established by Rivers remains private. A Trust is an agreement between the grantor and trustee and is not required to be filed with any government entity. Thus, its terms remain private during life and after death of the grantor. When executed and administered properly, this is a significant benefit to the grantor and to the beneficiaries of the Trust since it reduces the likelihood of conflict amongst beneficiaries and keeps what most of us consider a personal matter out of the public court system.
Pourover Will
Even if you have a Trust, a Will is necessary. It is equally important that the Will not conflict with the Trust. Rivers’s 2011 Will simply leaves all of her individually owned assets to her Trust. This is known as a “pourover” Will and is an important part of a complete estate plan. Without this document, any individually owned assets would not reach Rivers’s Trust and would instead pass through the probate court to her heirs, contrary to her wishes.
Choice of Executors
A Will allows you to choose who will serve as the executor of your estate to ensure that your assets are distributed in accordance with your wishes. In the absence of a Will, state law dictates the priority of the decedent’s relatives to serve if they petition to do so. Rivers’s 2011 Will appoints her daughter, Melissa Rivers, her business manager, Michael D. Karlin, and her friend, Robert Higdon, to serve as co-executors, with any vacancy of the three co-executors to be filled by her assistant, Jocelyn Pickett, and then her publicist Scott Currie. While appointing three co-executors to serve is not usually advisable, absent her legal declaration, only her daughter would have had legal standing to serve as administrator.
Division of Estate
As mentioned above, when a Trust is utilized, the division and distribution of assets is not required to be disclosed unless a conflict ensues. Thus, the recipients’ shares of Rivers’s estate are unlikely to ever be disclosed completely, even though media reports do indicate that her daughter, nieces and nephews, her beloved dogs and several charities are named beneficiaries of her Trust.
Obviously, when it comes to an inheritance, the division and distribution of assets are the most likely issues to be contested, leading to legal conflict and strained relationships amongst beneficiaries. For this reason, the privacy and trustee powers afforded by a Trust become far more valuable in such situations and it is crucial that the division and distribution provisions be drafted clearly and not leave any loose ends.
No Contest Provision
Rivers’s Will included a “no contest” provision, which states that if any person contests her Will or the “Protected Instrument” (presumably her Trust), then that person and all of his or her descendants will be disinherited and treated as if they predeceased Rivers. The “no contest” provision is optional and is commonly implemented when an estate is to be distributed in unequal shares or to individuals or entities other than the immediate family. Due to the nature and purpose of the provision, it is important that the relationships and consequences be clearly discussed before drafting the “no contest” clause.
Your Resolution
The estate plan established by Joan Rivers is a great example of proper, updated planning. In addition to providing for her loved ones and causes that she believed in, she ensured that the distribution of her estate would remain private, be handled by the individuals of her choice and be completed as efficiently as possible. These are important goals for everyone and, through proper estate planning, can be accomplished painlessly. Only through a proper estate plan can you ensure that your wishes will be respected and your loved will receive your assets while minimizing the costs and delays of administration.