John Bullis: Even celebrities make estate planning mistakes

Lots of folks make many mistakes when putting their estate plans together.

They wait until it's too late. They don't work with a professional team of advisers. They let documents get out of date. They don't make proper plans for younger children.

They don't make plans for the family business. They forget to plan for the possibility of their incapacity.

Howard Hughes died at age 70. He was worth about $2.5 billion. He did not have a valid will and the estate was finally distributed to his cousins.

Doris Duke inherited about $100 million when she was 12 years old. She named Bernard Lafferty to be her executor. He had very little practical education or experience in acting as a fiduciary for the $1.2 billion estate. One court in New York decided he was squandering the estate's money. It is reported he was relieved when he was removed as executor (but he did get a sizeable settlement, including a $500,000 annual bequest). Most of the remainder went to charity.

Joe Robbie, owner of the Miami Dolphins and the football stadium, died in 1990. His estate was worth more than $100 million. His heirs did not get along very well. He did not have a good plan to continue the family business. There was not enough cash (liquidity) in the estate to cover the death taxes so the team and the stadium had to be sold. The estate taxes could have easily been much less, about $25 million less. The family members that were named as trustees of his trust could not agree or get along.

Anna Nicole Smith married a Texas oil tycoon in 1994. He was 89 and she was 26. Her will done in April 2001 named her son Daniel as the sole beneficiary of her estate. Her attorney and companion Howard K. Stern was named the executor. Daniel died at age 20 from an apparent drug overdose in 2006. Anna Nicole Smith gave birth to a daughter on Sept. 7, 2006 and Anna Nicole Smith died about five months later. Some of the questions include: Who did she intend to be the guardian for the daughter? What provisions did she want to make for her daughter? Why didn't she name some contingent heirs?

We suggest you review your estate planning with a team of professional advisers at least every two years and whenever big changes happen in your life.

Did you hear "Honk if you love peace and quiet"?

• John Bullis is a certified public accountant, personal financial specialist and certified senior advisor serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.