RSS Feeds
Facebook
GRS Twitter
You don’t normally find celebrity gossip at Get Rich Slowly, and for good reason: I’m completely out of touch with pop culture. (Plus there’s the fact that this is a personal finance blog, I guess.) But the January death of 28-year-old actor Heath Ledger highlights the need for even young adults to consider basic estate planning. According to The New York Times:
Heath Ledger’s will left nothing to his former girlfriend and their 2-year-old daughter because it was filed in Australia in 2003 and never updated after they became part of his life, The Associated Press reported. A copy of the will, filed in Manhattan Surrogate’s Court, shows that Mr. Ledger, a native of Australia, left everything to his parents and three sisters
Ledger’s family has indicated that they will make certain to provide for his former girlfriend, Michelle Williams, and their daughter, Matilda Rose. But it might not have ended like this. The Ledgers are under no legal obligation to do anything with the money other than keep it.
Wills are not just for senior citizens. “The importance of an up-to-date will cannot be overstated,” writes David Chilton in The Wealthy Barber. Wills give clear, legal instructions regarding your intentions. Verbally expressing your wishes isn’t enough. A will is crucial even for those with modest assets.
I normally mention wills and estate planning only once a year — on Halloween.
- In 2006 I shared a brief guide to creating will.
- Last fall I gave a brief overview of estate planning software.
Ledger’s untimely death provides a sober reminder that proper estate planning is an important part of everybody’s personal finances.
This article is about Basics, News, Planning Monday, 17th March 2008 (by J.D. Roth)
March 17th, 2008 at 1:53 pm
Good post J.D. It’s something that no one likes to talk about but everyone needs to. I’ve been putting it off because I keep telling myself I have plenty of time. This goes to show you that you really never know.
March 17th, 2008 at 2:22 pm
Laws are different around the world (I can’t speak for Australia, for example). But I thought it would be worth mentioning that having a will isn’t iron-clad that it will be followed. I don’t want to downplay it, but don’t think that just because you jot something down in a will that that’s what will happen with your assets. They can be challenged and are still subject to the probate proceedings in this country. I believe you have to go to the level of trusts to avoid the probate process.
March 17th, 2008 at 5:15 pm
There’s a great post at Neil Gaiman’s blog about his crusade to make sure creative people have wills.
Since copyrights live on after the artist’s death (usually), it’s especially important to make sure they’re handled the way you want them to after you’re gone.
Great tip, JD.
March 17th, 2008 at 5:38 pm
I’m not sure why his will would ever have provided for a former girlfriend. If it had provided for Williams, people would be in uproar about his will being out of date. As for it not including his daughter, that is a tremendous oversight. But the law would allow her and her guardian to have a claim anyway.
March 17th, 2008 at 5:43 pm
But… but… I don’t want to contemplate my mortality! I’m in my 20s!
March 17th, 2008 at 6:26 pm
I’ll be 29 this year and I’ve thought for a number of years that I should get a will. I don’t have a partner and don’t plan on having kids, so really, who is going to know what I want? I don’t have much, but I think it’s good to not leave all that stuff up to your family.
March 17th, 2008 at 6:30 pm
I’ve been thinking about this topic recently. Some research reveals, as JACK (#2) says, a will still means the estate goes through probate (which can take some considerable amount of time). At what point should one start considering a trust rather than a will? Any articles/sites that go over the pros and cons (and costs) of each?
March 17th, 2008 at 6:45 pm
This is a message all us personal finance bloggers should work harder to get out there to the general public. Many people think if they have no assets they don’t need a will. However, we know that wills spell out many other things, including custody of children and transfer of non-monetary assets (homes, etc.). Excellent post, J.D.
March 17th, 2008 at 6:49 pm
Good question, fontraid, and something for me to research for the future!
March 17th, 2008 at 7:21 pm
JD, what normally happens when a person pass away and they’re still in debt? As in what happens to the debt. Not much a will can do if they’re not out of debt and I can only imagine how many Americans are actually in debt way over their heads and obviously relying on retirement money from the government or SSI may or may not be sufficient to cover this debt when you pass. At that point what happens and in regards to the will, it sounds like it obviously won’t have anything to pass on.
March 17th, 2008 at 10:05 pm
I have a theory ( and someone correct me if I am way off in my thinking here). Don’t wealthy people usually do some creative estate planning outside of wills? Who is to say he didn’t leave his daughter money in other vehicles, perhaps some sort of trust(s) that isn’t public knowledge? maybe some life insurance?
I really don’t know much about this subject, but it just occurs to me that it’s possible there is something else besides what is in his publicly available will. Well, that and I’d like to hope he stashed away some more significant assets than what is being reported.
March 17th, 2008 at 10:13 pm
I misread the asset total ( though it has been misreported in several places). I see it is supposed to just include his NY assets. Maybe he had more money and property in Australia. Everything I have read makes it seem like the guy died with only a hundred grand and an old van.
He supposedly was making $2-3 million a film back in 2001-2002 or so. I know he has done a lot of low budget projects, but I’m sure he was still commanding 7 figures for the big budget stuff like Batman.
March 18th, 2008 at 2:20 am
I think it’s that when he wrote the will he only had $100k and a van, so that’s all that’s mentioned in the will. Subsequently he made more money. Of course I’m just repeating second-hand rumours here, but that’s my understanding.
Under some jurisdictions it’s possible that his daughter has a claim to the money, regardless of what’s in the will. I’m pretty sure that in France (for example) it’s almost impossible to completely disinherit your children. Check out the laws in your area so that you know and can plan for all possibilities.
March 18th, 2008 at 3:08 am
This really gives me a kick in the arse, although I don’t have huge assets I do have a small family. Better look into this whole will thing.
March 18th, 2008 at 6:51 am
Re the debt question: at least for credit cards, the debt becomes the responsibility of the secondary account holder or cosigner. If the account is held by a single person, the debt goes away. (Banks carry insurance which pays off the debt in the event the account holders die.)
March 18th, 2008 at 7:44 am
I remember when I was a kid and my mom finally got a will in place so that custody would be sorted out. It was quite relieving. Turning 18 felt like another milestone, however, because I knew I was old enough that some court couldn’t make up its own mind about custody. She wanted to send me to her Canadian sister, which was why I was nervous about the court not liking us leaving the country.
Still, she had a backup custody suggestion and was pretty well-prepared.
March 18th, 2008 at 8:48 am
Also something scary to think about for people with kids: in some states, if you are the only guardian (think single parents, or both guardians die at the same time) and you pass on without naming a guardian for your kids, the STATE GETS YOUR KIDS until a judge decides who in your family will take them. That’s the case in my state of VA. Usually, around here, the judges let kids stay with the next closest family member till it all gets sorted out, but if there’s any fighting whatsoever among your family, those kids get put in the foster care system. Not that there’s anything wrong with foster care, but think about the emotional strain on your young ones of losing parents AND not being around your family. Assets or not, write a will and get it notarized. Today. Death does not wait for you to get everything in order in your own time.
Thanks JD, for bringing up such an unpleasant but important topic.
March 18th, 2008 at 3:51 pm
The Ledgers are under no legal obligation to do anything with the money other than keep it.
I’m not sure about that. If the will is being probated in New York, well, I believe that New York law makes automatic provision for children born after a will is made unless there’s explicit evidence of intent to disinherit. So little Matilda might be automatically covered under the state laws (or the laws of whatever jurisdiction governs).
Doesn’t take away from your main point, though.
March 19th, 2008 at 6:33 pm
Sounds to me like the will is being probated in Australia, not NYC.
One (somewhat controversial) “what-if” for your consideration: had Ledger married his girlfriend, both she and his daughter would now be getting a decent monthly survivor’s benefit from (U.S.) Social Security.
And it is only in some U.S. states that traditional probate is slower than using a revocable living trust for estate planning.
The biggest advantage to a trust is its privacy - wills once filed for probate are public record, so anyone can see where the money goes (and target the beneficiaries)
Even if a trust is challenged (e.g. by a presumptive beneficiary who isn’t), the court won’t allow trust details to be made public.
March 20th, 2008 at 9:20 am
I’m only 21, and my most valuable asset is my laptop. To me, it’s worth about $3,500. To the rest of the world, it’s worth about $250 or so. It’s worth so much more to me because of the hassle I’d have to go through re-installing programs, doing Windows Update, getting all my settings back to the way I want them, finding the more recent pictures I saved to my hard drive, but didn’t back up on the external hard drive, etc.
The other “expensive” stuff I own is a monitor, a LaserJet Printer (that’s in need of repair) and a Dana Alphasmart (which is pretty much a over-hyped piece of shit. It sucks as a replacement laptop, which is what I bought it for, mostly). Everything else is just clothes, bedding and notebooks/paper.
Really, about the only thing I supposed I could give in a will (that’d be worth any money to anyone) would be copyrights on my journals, if ever anyone felt the insane need to publish them (they’re not that interesting), or my sketchbooks (which aren’t so much about talent as they are about patience). There’s also a few poems, that I’m going to eventually turn into an eBook of some form (assuming I have more stuff I can put in there other than just 12 or so poems :/).
OH! I know! I’d want to put in the will that mom/mom’s side of the family get nothing (mom wasn’t very nice to me or dad. She’s got a mental illness, but as her daughter, the knowledge of this doesn’t make her actions any less hurtful, or make me feel any less protective of my father). I know I’d like to write in my will that mom’s not invited to my funeral, but I know my dad will invite her anyways (because he’s all honourable that way. Something about him that I admire, even though it frustrates me at times). I imagine, I’d have to write a clause that allows her to get kicked out of the funeral & after party if she causes any trouble whatsoever for dad (although, again, no one on dad’s side of the family is going to bother enforcing this. They’re all too honourable).
Other than those two things, there’s nothing for me to leave. I have no significant other at this time, and no offspring (and I’m hoping to remain child free for my entire life. Mostly because I don’t feel I’d make an adequate parent for a child. I tend to expect them to act like little adults almost all the time, unless they’re outdoors, on a playground, or in a gym of some kind).
June 18th, 2009 at 5:01 am
I think family is a highly overrated thing. I am not leaving one cent to my kids or my overbearing family.
My kids took my husband’s side when he cheated on me, plus he didn’t support his kids. When my husband thought a man wanted me, all hell broke loose. I got proof, but those brats still took his side.
My only regret is that the state I live in REQUIRES that I leave my husband something! I have started divorce proceedings and hope he’ll sign a separation agreement that will give him nothing.