3 Ways to Avoid Tom Petty’s Estate Planning Mistakes
By Solid Serenity Legal Solutions
We often think that famous people would have the guidance, money, and information to leave their property to their loved ones exactly as they like and to put a proper estate plan into place. Despite their large amount of wealth and boundless access to information and knowledgeable professionals, that’s not always the case.
Due to Tom Petty’s estate planning decisions, his family has been embroiled in turmoil and legal battles since his death in 2017. Though he had a trust in place, he made some choices that opened his estate up to arguments between his adult daughters from his first marriage and his second wife. Find out 3 ways to avoid Tom Petty’s estate planning mistakes below.
(1) Understand Family Dynamics
Petty died in late 2017 of an apparent drug overdose. In early 2019, Petty’s daughters sued his second wife claiming she did not allow them to participate in determining how Petty’s unpublished works would be released. They claimed that because Petty’s trust allowed them “equal participation” in decisions regarding his work, they were given the majority vote (2/3).
Petty made his wife the sole Trustee of the estate. So, Petty’s daughters also claimed his wife took assets from the Trust that belonged to the daughters.
When making your plan, be sure to account for your family dynamics. If your family has some strain in the relationships of your heirs, it is wise to give control to one or two people who work well together, and possibly give the estranged member the ability to review decisions and/or appeal them to a neutral third party.
This is especially important in blended families. Even if your new spouse and children get along exceptionally well, you can’t be certain what will happen if you’re not there to referee. Though you know your situation best, consider provisions specifically for your spouse and separate provisions addressing your children’s inheritances.
(2) Make Your Plan Clear and Concise
Petty’s trust appears to leave room for interpretation. He chose to name his wife as Trustee, but to give his daughters “equal participation” in decisions regarding his work. Unfortunately for Petty’s family, we can’t say if “equal participation” meant each person has an equal say, or if he meant for the daughters to have a joint 50% say to his wife’s 50%.
When making your plan, especially if there are strained family relationships, be sure to be clear and concise with your wishes. Spell them out in detail so there is no ambiguity to fight about later.
(3) Consider a Tie-Breaker
Petty gave 3 parties with conflicting interests the ability to have equal say in some decisions about his estate. It appears he did not name someone who could mediate those decisions or break ties without the need to go to Court- which is a costly and lengthy procedure.
When making your plan, consider choosing a sole decision-maker. If that’s not possible for your situation, remember that even people who adore each other can disagree. So, consider naming a neutral third-party you trust to mediate and/or make tie-breaking decisions when your decision-makers can’t agree.
If you need help getting started on your plan, check out these tips for modern families. And, call us to put your plan in place.