What Can We Learn From Carrie Fisher & Debbie Reynolds?

Actress Carrie Fisher, best known for her role as Princess Leia, passed away on December 27, 2016, at the age of 60 with an estate valued at around $25M. The very next day, her mother, Debbie Reynolds passed way at the age of 84 with an estate valued at around $70M.  Both Carrie and Debbie established estate plans including trusts and last wills, however, in Carrie’s case, a probate was required to move forgotten-about assets into her trust and Debbie’ death just one day later created an additional, unexpected layer of estate administration.

So, what can we learn from this mother-daughter estate plan problem?

We can talk all about the importance of having a pour-over last will when there’s a trust in place. The obvious question is “why do I need a last will if I have a trust?” And, that’s a great question! Sometimes we find ourselves needing a probate EVEN IF we fund the trust perfectly. Sadly, yes! Even if we do everything right (which is why we never judge!), we may still find ourselves in probate court, and this is the scenario:

When someone passes away, the funeral home circulates that person’s social security number, and everyone finds out right away (within 24-48 hours). The financial institutions are alerted, and they flag the decedent’s accounts – no money in and no money out of that account. So, if the account had a beneficiary, that account knows where to go and the account assets avoid probate and go directly to the named beneficiaries of that account (yay!).

But what happens if we get NEW money in the estate…after someone passes away. Sometimes after someone passes, we sue the hospital or the nursing home, or the IRS will send us a refund check. Now we have a check made out to the decedent. We can’t deposit the funds into their account as the bank has most likely flagged the account. That newly gained asset will need to go through the last will (if there is one) and through the probate process to get to the heirs. Anything new in the estate will need to be probated.

A pour-over last will literally pours over any estate asset into the trust (us lawyers are not very creative LOL). The trust controls what’s inside the box and the last will moves anything that’s outside of the box (that doesn’t know where to go) into the trust.

So, there you have it! We learn that a trust deserves a matching last will that “pours over” into the trust. We also learn that your last will and/or trust should have backup beneficiaries….just in case.