I was recently forwarded an article regarding the much publicized death of singer/songwriter Amy Winehouse. Ms. Winehouse, a multiple Grammy award winner and owner of many successful songs and albums, had an extremely successful, yet short-lived career. Prior to her death, on July 23, 2011, Ms. Winehouse amassed a fortune reported to be approximately $4,660,000.00. At the time of her death, Ms. Winehouse was 27 years of age.
Young, successful, and seemingly without a care in the world, the last thing on Ms. Winehouse’s mind was probably the notion of creating an estate plan. As a result, Ms. Winehouse died intestate, i.e. without a will. While I am unfamiliar with the estate practices in England, they appear to adhere to a similar system as we do here in the United States. The consequence, of death without a will, here in the United States, is distribution through intestate succession. Ms. Winehouse, at the time of her death, was unmarried and without children. Therefore, the totality of her estate, all $4,660,000.00, will be distributed to her parents, the closest blood relative of Ms. Winehouse then living at the time of her death. This will be true no matter what Ms. Winehouse would have wished. Moreover, this outright distribution to her parents could eventually cause tax problems for her parents, and possibly other problems relating to government benefits.
I always stress to my clients that it is never too early or too late to start planning. Moreover, estate planning is often not about estate taxes, but making sure that your assets go to who you want, in the way you want, in the control of who you want. Here, young Ms. Winehouse had every reason to create an estate plan, as a result of her success. Her failure to do so has left the matter in the hands of the courts and the distribution of her estate will likely be more costly than if she had planned.
Plan early, and plan often, to avoid such circumstances.
– Gary Altman and Adam Abramowitz, Esq.