You’ve seen the mansions, the land, and all the things celebrities leave in their wake, but what happens to those things when they die?
One important thing to note is that celebrities leave behind two kinds of assets, according to Marketplace.org: tangible assets, like cars, money, and property, and intangible assets, like copyrights and trademarks. A lot of the money left behind is in the intangible assets, from a musician’s songs being played on streaming platforms to their name and image being used on merchandise. Lawyers managing the estate usually get around 10% or more of those profits. Other parts of the profits go to the IRS, which collects a payment when the person dies, and income tax takes another chunk of it — up to 40%.
In a Harvard Law School Interview, attorney John Branca noted that celebrities are businesses, so it’s important for them to have their affairs in order for when they die. Branca gave the example of when Prince died. There was a lot of confusion and disagreement between beneficiaries because Prince didn’t have a will in place. Branca said. With no will, a bank was appointed to run his estate, which is a problem when the bank doesn’t know anything about the entertainment business.
According to Kiplinger, celebrities make common mistakes in estate planning, like not updating their beneficiaries, which results in people inheriting the money who are no longer in their lives, or someone who should receive something not getting anything. Celebrities also make mistakes like not putting their promises in writing or not letting their families know where their estate plans are. In Michael Jackson’s case, he created a trust from which his mother and children would inherit money when he died, but he never put money in the trust, which led to legal battles.
Branca emphasized an important point for celebrities: Many don’t think about estate planning, but it’s particularly important if they want their estates to be handled properly and for their family to receive what they want them to.