5 Lessons Joan Rivers Can Teach Us About Estate Planning

joan riversLegendary entertainer Joan Rivers, who died last week at age 81, broke barriers in the world of comedy. But Rivers left another important legacy.

An extremely savvy businesswoman, Rivers accumulated an estate valued between $150 million and $250 million in assets, thanks to lavish real estate, collectibles, and income from TV hosting and QVC clothing and jewelry royalties.

Not surprising for a woman who rewrote the rules for female comediennes, Rivers proved equally masterful in managing her own estate, and left detailed instructions on what she wanted to happen at her death.

Here’s 5 valuable estate planning lessons we can learn from Rivers:

Prepare for the unexpected. As we all know, Rivers’ routine out-patient surgery went awry, and subsequent complications led to her death on September 4.  That tragic outcome was unexpected, but Joan had wisely planned ahead and drafted advance directives with the help of her estate planning attorney.

Advance directives are legal documents that allow family members (or anyone named by the person who signs them) to make medical and life support decisions for someone who becomes unable to do so. Rivers’ daughter Melissa made the extremely difficult decision to take her mother off life support on September 4, most likely acting under the authority of an advance directive left by her mother that allowed her to make that decision.

As sad as this is, the alternative could be worse. Without advance directives, it’s much less likely that you’ll receive the type of care and treatment you want, and other parties not familiar with your values or wishes – including the court – might need to step in to make decisions for you.

Leave clear instructions for your funeral arrangements and memorial service. Rivers did exactly that, laughingly writing in her book that she wanted a Hollywood extravaganza of a funeral. Other celebrities have been less clear about their final wishes, or failed to designate who was ultimately in charge, resulting in the bizarre funeral battles over the bodies of broadcast pioneer Casey Kasem and singer James Brown, among others. If you’re part of a blended family with step-children and multiple marriages, like Kasem or Brown, make sure to review your arrangements with your attorney and execute all the necessary documents to minimizing feuding.

joan rivers with dogTake care of your furry friends.  Rivers’ estate arrangements reportedly included special provisions for the care of her four dogs –  two rescue dogs who lived in her New York penthouse and two other dogs who resided at her home in California.  Rivers adored her pet friends, and news reports said the dogs were brought to visit her in the hospital shortly before she died.

If you have pets, don’t leave them high and dry. Leave instructions and provisions to ensure that your pets are cared for as you’d wish after you die.

Brief the family on your plans.  In Rivers’ documentary “A Piece of Work,” she’s heard reassuring daughter Melissa that she has no need to worry if Joan dies, saying “it’s all in your name.”

Families don’t always do a good job communicating their plans to loved ones. There’s no need to cover your plans in minute detail.  After all, you may always change your mind, and your estate plans are your own private decisions. However, there’s no doubt it’s good to fill the family in on the general lines of your plan so they understand what you have in mind, can discuss any issues with you while you’re still alive, and most importantly, ask for clarification if anything is ambiguous or unclear.

Title assets properly. As befitting her large estate, Rivers used more complicated estate structures like family trusts to reduce the eventual tax bill and make sure business assets could be handled expeditiously at Joan’s death. With an estate well over the $5.34 million estate tax exemption (the amount each person can leave a non-spouse without paying federal estate tax), Rivers will undoubtedly pay millions in estate taxes to the IRS.

But titling assets properly may have helped avoid capital gains and other taxes on assets like Joan’s lavish $30 million New York penthouse (if the apartment was titled in Joan’s name at her death, all capital gains would be forgiven in a process called “step up,” allowing her heir Melissa to inherit the property without owing income taxes).

Not everyone needs a complex estate plan like Rivers, but it’s essential to get estate planning advice from an attorney specializing in that area. Their advice may not cost more than someone who’s a jack-of-all-trades, and keep in mind that expensive estate planning mistakes are not discovered until after your death or incapacity, when it’s way too late to fit them.

 

 

 

 

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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