The headline read “Battle Over Anne Heche’s Estate Settled” when it should have read “Yet Another Celebrity Dies Without an Estate Plan.” Anne Heche was a well-known actress who died unexpectedly following a fiery car crash in August 2022. Anne left behind two sons, one of whom is 20, the other of whom is 13, and no estate plan. Her case was tragic and the results were completely avoidable in many ways. Because Anne failed to create even a basic Will, her estate will pass pursuant to the laws of intestacy in California through a public probate process. In addition, California State Statutes will determine who will receive her estate and how they will receive it. Anne’s 20-year-old son petitioned and ultimately won the right to administer his mother’s estate, despite several claims brought by the father of Anne’s 13-year-old son. While he has won this battle, the war is far from over and he will undoubtedly have his work cut out for him administering his mother’s estate. Anne’s death illustrates yet another of the many reasons why it’s vital to have an Estate Plan, regardless of your age or level of wealth.
Anne could have avoided this result by creating a comprehensive Estate Plan. A comprehensive Estate Plan consists of a Revocable Trust, pour-over Will, Property Power of Attorney, Health Care Power of Attorney, Living Will, and a Health Insurance Portability and Accountability Act Authorization. These documents protect a client during life and at death and, if properly structured, can protect the beneficiaries as well. During life, the plan acts as a set of instructions regarding who makes what decision, be it medical or financial if the client is unable to make those decisions. At death, these documents dictate who controls the distribution of the estate, to whom the estate will be distributed, and when and how it will be distributed to those individuals. If the client signed a Revocable Trust, then that would keep the decedent’s plan private, unlike the public fight over who would distribute Anne’s. Of course, even if Anne had a Will, that Will would be public, although it would have allowed her to select the individual responsible for administering her estate, rather than letting the court decide who would administer the estate. While she may have named her son who now holds that responsibility, it’s entirely possible that she would have chosen someone older and with more experience in dealing with such matters. Most clients would not choose an unemployed 20-year-old to serve in this role.
If Anne had created a comprehensive Estate Plan, she could have included provisions to protect her children. For example, a lifetime trust for the benefit of each son would provide continuing asset management, divorce protection, asset protection, and estate tax protection for them. Because Anne failed to create any plan whatsoever, her eldest son will receive his inheritance outright. That will allow him unfettered access to the funds and will not protect them from the claims of his creditors. Her youngest son’s inheritance will likely end up in an account administered by someone else, potentially with significant court oversight. If Anne had taken the time to create a plan, she could have decided how she wanted each son to receive his inheritance and who would be responsible for distributing the assets to that son. By failing to create a comprehensive Estate Plan, Anne deprived her sons of these benefits and saddled them with some undesirable consequences at a time when they should have room to grieve her untimely death.
Anne’s eldest son has significant responsibilities and duties in administering her estate. He needs to collect and distribute the assets of the estate while defending various lawsuits and incurring significant attorneys’ fees, all on a public stage and while grieving the loss of his mother. Make sure that the same cannot be said for your own family by creating a comprehensive Estate Plan with a qualified Estate Planning Attorney.
Tereina Stidd, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
- Understanding and Manipulating Estate and Gift Taxes – Part II - May 30, 2023
- Understanding and Manipulating Estate and Gift Taxes - May 23, 2023
- What It Means to Disclaim - May 16, 2023