Whenever high-profile celebrities die, the story is often the same: a torrent of glowing memorials and fond remembrances, followed closely by stories about their troubled estates. Public interest in how much they were worth, who is inheriting what and whether the deceased planned properly to avoid messy legal battles among heirs and tax collectors becomes fodder for gossip pages.

When vast amounts of assets and diverse holdings are at stake, a simple will, no matter how strongly constructed and clearly written, may not be enough to ensure that an individual’s legacy is distributed in accordance with his or her wishes, according to estate-planning experts who work with extremely rich clients. If multiple spouses and children from various marriages and other relationships are involved, an estate may be tied up in court for years and have its value depleted by litigation costs. Minimizing that possibility requires celebrities, entertainers, professional athletes and other wealthy clients to take a proactive approach to estate planning and use all the tools and strategies available to protect and preserve what they leave behind, as well as future earnings such as royalties.

Some notable examples of celebrity estate plans gone awry include that of actor James Gandolfini, who died in 2013 at the age of 51 with a will that reportedly resulted in a whopping $30 million tax bill on an estate worth about $70 million. Similarly, the death of actor Philip Seymour Hoffman at the age of 46 last year sparked debate over his estate plan, which resulted in $15 million in taxes paid on an estate worth about $35 million.

“The number one priority is organization,” says Russell J. Fishkind, an estate planning attorney at Saul Ewing and author of Probate Wars of the Rich & Famous. “It’s important to get a team of advisors that includes an accountant, an estate planning attorney, a life insurance professional, a certified financial planner and a banker working together. … Too often that step is skipped.”

Wealthy high-profile individuals and celebrities who fail to employ comprehensive planning strategies are the ones whose estates often end up in costly and prolonged litigation and diluted by taxes that could have been avoided, he notes.

 “If you can have an estate plan that is harmonious and tax efficient, then you have accomplished something,” he says.

Profiting From The Grave
Benjamin Franklin famously observed that the only two certainties in life are death and taxes. The modern corollaries, at least as it applies to the ultra-wealthy, are tax audits and lawsuits.

Individual estate and trust income taxes provided the single-largest source of federal tax receipts in fiscal year 2012, accounting for about $1.4 trillion, or 55% of total tax revenue, according to the IRS.

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