Growing Your Wealth with Danielle Meister. For over 30 years, Madrona Financial & CPAs has been helping individuals and families improve their financial well-being by giving them experienced advice on public and alternative investments, real estate, insurance, taxes, executive compensation, business structure and business succession strategies, advanced gifting strategies, estate planning, and more. Madrona is headquartered in Washington State, while Danielle and her staff have offices in Park City and Cottonwood Heights, Utah

LEGACY PLANNING MISTAKES

No matter your age or net worth, you need a plan to protect yourself, your loved ones, and your assets during your lifetime, as well as
after your passing. However, discussing your own death isn’t a comfortable topic, so many avoid the conversation and the necessary work.

The list of estate planning failures is long and might surprise you. You might think that wealthy, high-profile celebrities would have comprehensive legacy plans in place; however, it turns out that many make the same mistakes, or procrastinate the same way as everyone else. Let’s learn from a few high-profile estate planning failures.

Zappos CEO and Park City homeowner, Tony Hsieh, passed away unexpectedly, without a will or trust, and as estimated by Forbes, an estate worth $840 million. Tony was never married and had no children, so his parents were legally entitled to inherit everything. Complicating the tragedy, Tony’s associate and friend, sued the estate for millions and ultimately won a settlement. With some planning, Tony could have designated exactly who his estate was left to and reduced the amount left to Uncle Sam. In the absence of an estate plan, his fortune was subject to a Federal Estate Tax rate of 40% – an estimated $336,000,000 tax bill that with professional planning could have been significantly reduced.

When singer Barry White passed away, he had been separated from, but not yet divorced from, his second wife. Because she was still named in the estate plan, Barry’s ex received everything, and his nine children and girlfriend of several years received nothing.

Whitney Houston died at age 48. Her will stipulated that her sole-beneficiary, her daughter, would receive 10% of the $115 million estate at age 18. Additional estate planning could have been orchestrated to instead, stagger smaller distributions at various ages once the beneficiary was mature enough to manage this amount of money more responsibly. Unfortunately, Whitney’s daughter passed away shortly after at age 22.

At the time of Heath Ledger’s unexpected death, his outdated will left everything to his parents and sisters. He neglected to update
the documents after his daughter was born, leaving her nothing.

Michael Jackson took the time to set up a trust; however, he never properly funded/ retitled assets into the trust. His lack of detailed planning defeated the purpose of having a trust and resulted in a public probate process, where his family members fought over the estate.

Sonny Bono died unexpectedly in a ski accident at age 62, after which it was revealed he had an unknown child born out of wedlock. Because Sonny failed to create a will, the estate was probated and his ex-wife, Cher, received most his estate. A portion of the estate was awarded to the child as well.

The young musician Jimmy Hendrix passed away at age 27 without a will. The court awarded everything to his father, and left nothing to his brother, whom he had a very close relationship with.

None of these celebrities anticipated their deaths and failed to plan appropriately to take care of their loved ones. Without detailed estate planning, probate court determines how your assets are split.

Do you want attorneys and strangers, in a very public setting, to determine how and to whom your estate is passed? Or do you want to privately maintain control of the wealth you created?

Have you completed the five most important estate planning documents?

• Durable Power of Attorney

• Advanced Healthcare Directive

• Living Will

• Revocable Living Trust

If you already have a legacy plan, follow this checklist to avoid falling behind:

• Update your legacy plan every five years.

• When a child is born/adopted, update your documents.

• If you have a revocable living trust, be sure to fully fund the trust by retitling assets in the name of the trust.

• If you have complex family circumstances, especially in the case of divorce or remarriage, have an updated estate plan
  in place. The law considers you to be legally married until your divorce decree is signed by a judge.

• Keep your estate plan in an easy to find location.

• Put promises into writing.

• Married couples, be sure your trust or will has language to double your estate tax exemption, to avoid excess federal taxes at death. The federal estate tax
  exemption is poised to be cut roughly in half in January 2026.

• If you have an estate above $6 million (single) or $12 million (married), think about implementing additional estate planning strategies prior to 2026.

Consider working with a professional team to learn from their expertise and ensure your legacy plan is handled in the most efective, tax-efcient manner possible based on your desires and intent.

DISCLOSURES: The information, suggestions, and recommendations included in this material is for informational purposes only and cannot be relied upon for any financial, legal or insurance purposes. Madrona Financial Services will not be held responsible for any detrimental reliance you place on this information. It is agreed that use of this information shall be on an “as is” basis and entirely at your own risk. Additionally, Madrona Financial Services cannot and does not guarantee the performance of any investment or insurance product. Insurance products are ofered through Madrona Insurance Services, LLC, a licensed insurance agency and afliate of Madrona Financial Services. Madrona Insurance Services and individual advisors afliated with Madrona Insurance Services and Madrona Financial Services receives commissions on the sale of insurance products. Clients are not required to purchase insurance products recommended or to otherwise implement financial advice through Madrona afliates. When we refer to preparation and filing of tax returns, tax returns are prepared and filed by our wholly-owned sister company Bauer Evans, Inc. P.S., a licensed certified public accounting firm. Madrona Financial Services, LLC is a registered investment adviser with the SEC. Our registration with the SEC or with any state securities authority does not imply a certain level of skill or training. Madrona Financial & CPAs is a registered trade name used singly and collectively for the afliated entities Madrona Financial Services, LLC (“Madrona”) and Bauer Evans, Inc., P.C. (“Bauer Evans”). Investment advisory services are provided through Madrona. CPA services are provided through Bauer Evans. While it’s essential to optimize your tax situation, it’s equally important to comply with tax laws and regulations. Always ensure that your tax-saving strategies are legal and appropriate for your financial situation.

WRITTEN BY DANIELLE MEISTER, MADRONA FINANCIAL & CPAS