ANNE HECHE DIES WITH CONFLICT AROUND HER WILL, LEAVING HER SONS & ESTATE IN LEGAL LIMBO—PART 1

Actress Anne Heche died this August following a tragic car accident in which she plowed her vehicle into a West Los Angeles home, where it burst into flames. After being pulled from the wreckage, the Emmy Award-winning actress was hospitalized in critical condition, suffering from severe burns and smoke inhalation.

The fiery accident left Heche brain-dead and comatose. However she was kept on life support for seven days in order to identify a suitable recipient for her organs, according to a statement from her publicist, which was in line with the actress’ wishes . After a successful match with organ donors, Heche was removed from life support on August 14th and died shortly thereafter. She was 53 years old. https://pagesix.com/2022/08/12/anne-heche-not-expected-to-survive-car-crash/?_ga=2.199837805.272709222.1663801684-802000813.1662580652

Heche is survived by two young sons. Her eldest, Homer Heche Laffoon, is 20 years old. He is from her marriage with ex-husband Coleman Laffoon. Her youngest son, Atlas Heche Tupper, is 13. His father is Canadian actor James Tupper, with whom Heche had a 10-year relationship following her divorce from Laffoon. Heche is also survived by her mother, Nancy Heche.

According to a court petition filed by her eldest son Homer on August 31st, Heche died without a will, and Homer requested that he be named executor of his late mother’s estate. However, on September 15th, Heche’s ex-boyfriend James Tupper filed a probate petition objecting to Homer’s bid. He claimed that Heche e-mailed him a copy of her will in 2011, leaving him (Tupper) in charge of her estate.  https://pagesix.com/2022/09/01/anne-heche-died-without-will-son-homer-seeks-control-of-estate/

In a report by Rolling Stone, Tupper says Heche nominated him to handle her affairs, allegedly stating in her e-mail, “My wishes are that all of my assets go to the control of Mr. James Tupper to be used to raise my children and then given to the children.” https://www.rollingstone.com/tv-movies/tv-movie-news/anne-heche-estate-war-1234594195/

Tupper requested that the court honor Heche’s final wishes and deny Homer’s petition, which he alleges incorrectly claimed she died intestate. Intestate is the legal term for when someone dies without a will. In Tupper’s petition, he questioned both Homer’s ability to carry out the executor role and his motives, noting that “Homer is only 20 years of age and is unemployed, and was estranged from [Heche] at the time of her death.”

While we can’t know for certain whether or not Anne Heche had a will or if the will Tupper describes is valid, given that there is so much confusion surrounding her will, the late actress most likely didn’t have any trusts set up either. Her failure to plan is likely to create a number of major problems for her two sons and other surviving loved ones.

With this in mind, in this series of articles we’ll discuss Heche’s estate planning mistakes and how those errors will likely impact her family and assets. From there, we’ll outline what you can learn from this tragic situation and the steps you can take to make certain that your loved ones never need to endure a similar situation.

 

PROBATE: A NEEDLESS ORDEAL & EXPENSE

If you die without a will, or with uncertainty around your will, as Heche did—and even if your estate plan includes a will alone—you are guaranteeing your family will have to deal with the court process of probate upon your death or incapacity. Like all court proceedings, probate can be long, costly, and traumatic for your surviving loved ones.

Until Heche’s estate completes the probate process, her assets will be mostly inaccessible to her heirs. As a result, her sons, Homer and Atlas, could be left without any financial support from their late mother for quite a significant amount of time.

It will likely take many months just to locate all of Heche’s assets, and it’s likely some of those assets will get overlooked—and some may never be found. All told, there is approximately $58 billion in unclaimed property across the United States, and this is exactly how a great deal of it ends up lost.

To ensure all of her assets are located and accounted for, Heche could have had a relationship with a lawyer who, ideally, would have created (and maintained) an inventory of her assets. Such an inventory not only makes creating your estate plan much easier, but most importantly, it allows your loved ones to know what you have, where it is, and how to access it if something happens to you.

As your estate planning lawyer, we will not only help you create a comprehensive asset inventory, we’ll make sure it stays regularly updated throughout your lifetime.

 

A LONG, EXPENSIVE, & PUBLIC PROCESS

What we know so far is that Heche didn’t seem to have a lawyer who created an inventory of her assets, or to make sure her surviving family would stay out of court, or even out of conflict. As a result, her estate is likely to be stuck in probate for at least a year or more. Even then, that assumes everything goes smoothly and there are no serious conflicts or disputes among Heche’s potential heirs or creditors, which is common following a celebrity’s death—and as we are already seeing between Homer and Tupper.

In fact, with his surviving heirs and creditors fighting over the rights to his vast fortune, it took more than six years for Prince’s estate to be settled. https://www.rollingstone.com/music/music-news/prince-estate-value-1285413/

The unnecessarily lengthy time frame is just one of the drawbacks to probate—the unnecessary expense of a probate case is a whole other issue. Before Homer and Atlas can inherit a dime, a veritable army of other people and entities—attorneys, a personal representative, accountants, various advisors, creditors, and possibly, the IRS—must all be paid, and this is likely to seriously deplete Heche’s estate.

Probate costs in California average 5% of the total value of the estate, leaving an estimated cost to her family of approximately $200,000 or more. Most of these fees could have been avoided with a properly established estate plan—and with a lawyer to guide her and her family throughout her life and beyond.

Last, and perhaps worst, probate is open to the public, so all of Heche’s dirty laundry will be fodder for the tabloids, as it already has been for so much of her life. Given the actress’ past history with mental illness and her contentious relationships with her mother, ex-husband, and Ellen DeGeneres, the tabloids are likely to dig up plenty of dirt.

Fortunately, there’s a simple solution to ensuring your surviving loved ones will avoid the cost, time delay, and public nature of probate upon your eventual death or potential incapacity, and this solution is available not only to rich celebrities, but to regular folks, as well.

With a well-counseled and drafted estate plan, likely including a living trust in addition to a will (and a trusted advisor to support it all), Homer and Atlas would have been able to access their late mother’s assets without the need for any court intervention whatsoever, if that’s what Heche would have wanted.

Alternatively, Heche could have made it clear that she wanted Tupper controlling her affairs, and her lawyer could have confirmed that without dispute. Finally, as long as a trust is properly created and maintained, it will remain private, and the transfer of assets to your heirs can happen within the privacy of our office, not a courtroom, and on your family’s time.

This would have prevented the tabloids and other potential bad actors from getting access to the details of Heche’s assets, her beneficiaries, and family conflicts, all of which will now be readily available for public consumption.

Don’t let your loved ones be left with a mess like Anne Heche’s family is dealing with now. Using our Life & Legacy Planning process, we’ll work with you to put in place the right combination of estate planning solutions to fit with your asset profile, family dynamics, budget, as well as your overall goals and desires.

Next week, in part two of this series, we’ll discuss the type of trust Heche could have used to pass on her assets to her two young sons.

PLANNING FOR INCAPACITY & END-OF-LIFE CARE

Heche’s untimely death is a vivid reminder that estate planning isn’t just about planning for the distribution of one’s assets after death, but also planning for incapacity and end-of-life care. With this in mind, in part two, we’ll also address the estate planning tools the late actress should have had in place to deal with the time period following her terrible accident when she was in a coma.

Until then, if you need to create your estate plan, or you need to review an existing plan, reach out to us to schedule your visit. With our guidance and support, we can help keep your family out of court and conflict, and ensure your loved ones won’t have to endure the same tragic consequences as Heche’s.

 

Or: Why Should Business Owners Have An Estate Plan?

If you’re running a business, it’s easy to give estate planning less priority than your other business matters. After all, if you’re facing challenges meeting next month’s payroll or your goals for growth over the coming quarter, concerns over your potential incapacity or death seem far less urgent.

The reality is that considering what would happen to your business in the event of your incapacity or when you die is one of your most pressing responsibilities as a business owner. Although estate planning and business planning may seem like two separate tasks, they’re actually inexorably linked. Given that your business is likely your family’s most valuable asset, estate planning is crucial not only for your company’s continued success, but also for your loved ones’ future well being.

Without a proper estate plan, your team, clients, and family could face dire consequences if something should happen to you. Fortunately, these dangers can be mitigated fairly easily if you use a few basic estate planning strategies. To demonstrate why proper estate planning is so important for business owners, here are four issues your company and family are likely to encounter as a result of poor estate planning. We also give you some ideas about the corresponding estate planning solutions you can use to prevent and/or mitigate those issues.

Issue #1: If your estate plan consists of only a will, your estate—including your business and its assets—must go through probate when you die.

When it comes to creating an estate plan, most people typically think of a will. While it’s possible to leave your business to someone in your will, it’s far from the ideal option. That’s because upon your death, all assets passed through a will must first go through the court process known as probate.

During probate, the court oversees your will’s administration to ensure your assets (including your business) are distributed according to your wishes. But probate can take months, or even years, to complete, and it can also be quite expensive. This situation can seriously disrupt your operation and its cash flow. What’s more, probate is a public process, potentially leaving your business affairs open to your competitors.

Plus, while your family and team may know how to run your company without you, they might be unable to access vital assets, such as financial accounts, until probate is concluded. Moreover, even if they can access all of the needed assets, the legal fees charged by the lawyers your family will likely have to hire to help them navigate probate can quickly deplete your company’s coffers.

This is all assuming your will isn’t disputed during probate, which is also a real possibility, especially with a highly profitable business at stake. If your heirs disagree about whom you name to control your business and/or how the business assets should be divided, a vicious court battle could ensue and drag on for years, dividing your family and crippling your company.

 

Estate Planning Solution: Given the drawbacks associated with a will, a better way to ensure your business’s continued success following your death is by placing your company in a trust: either a revocable living trust, an irrevocable trust, or some combination of the two. A trust is not required to go through probate, and all assets placed within the trust are immediately transferred to the person, or persons, of your choice in the event of your death or incapacit

When you die, having your business held in trust would allow for the smooth transition of control of your company, without the time and expense associated with probate. Plus, trusts are not open to the public, so your company’s internal affairs would remain private, and the transfer of ownership can take place in your lawyer’s office, not a courtroom. Finally, trusts, especially irrevocable trusts, can help shield your business and its assets from creditors and lawsuits, which could threaten your company with you out of the picture.

 

Issue #2: If you become incapacitated by illness or injury and you haven’t legally named someone to manage your business assets, the court will choose someone for you.

Another issue with relying solely on a will is that a will only goes into effect when you die and offers no protection for your business if you’re incapacitated by accident or illness. With just a will—or no estate plan at all—the court will appoint a financial guardian or conservator to assume control of your business until you recover

Like probate, the court process associated with guardianship can be long and costly. Whether the guardian is a family member, employee, or outside professional, it’s doubtful that individual would run your business exactly how you would want them to, and this can seriously disrupt your operation. Not to mention, having a court-appointed guardian managing your business affairs can lead to serious conflicts and strife within both your team and family, particularly if you’re out for a lengthy period.

 

Estate Planning Solution: One estate planning vehicle that can prevent this is a durable financial power of attorney. A durable financial power of attorney allows you to name the person you would want to run your business and handle all of your other financial affairs if you ever become unable to do so yourself. If you’re sidelined by illness or injury, this person will be granted legal authority to handle your business affairs, such as managing payroll, signing documents, and making financial decisions.

This not only speeds the expense and delay associated with the guardianship process, but it also ensures that while you are incapacitated, your company and other financial interests will be managed by someone you trust, rather than relying on the court to choose someone for you.

Again, most ideally, having a trust and a named Trustee, would allow your business to be operated in the event of your incapacity, without the necessity for any court process at all.

 

Issue #3: If your business partner dies and you don’t have a legal agreement that allows you to purchase your partner’s share of ownership in your company, along with a source of liquidity to fund that purchase, you could find yourself in business with your partner’s heirs. 

If you share ownership of your business with one or more other people, it’s crucial that you have a legally binding plan in place designating what would happen to each partner’s ownership interests should one of you leave the company, get divorced, die, or become incapaciated. Without such a plan in place, along with the funds needed to execute that plan, all sorts of potential problems and conflicts can arise.

 

For example, should your partner die without such a plan in place and the partner’s children inherit his share of ownership in your business, you could find yourself in business with your partner’s kids or be forced to pay an inflated price for their share of the business. A similar situation could arise should your partner get divorced and your partner’s former spouse is awarded a share of the company in the divorce settlement.

 

Estate Planning Solution: To prevent such conflicts, you should create a buy-sell agreement. A buy-sell agreement outlines exactly what would happen to your business in the event an owner leaves the company for any number of reasons, or when one of the owners die, becomes incapacitated, or gets divorced.

For example, a buy-sell agreement can ensure that should certain triggering events occur—like a partner’s retirement, death, or permanent incapacity—the remaining owners are able to purchase that partner’s share of the business. In this way, an effective buy-sell agreement can prevent you from having to deal with new partners you didn’t count on. At the same time, a buy-sell can help prevent your loved ones from getting stuck owning a business they don’t want and can’t sell.

In addition to having a buy-sell agreement in place, you will also need to have a source of funding that allows the surviving owners to buy out the deceased partner’s shares. In most cases, the best way to fund your buy-sell is by purchasing life insurance. For example, the company can purchase a life insurance policy on each of the owners, and the company would receive the death benefit to purchase the deceased owner’s share of the business and/or buy out the deceased’s heirs.

 

Issue #4: If you name a family member to run your company after your death and you don’t provide them with a detailed plan, your business can be ruined by just a few poor decisions.

There are countless stories of family members assuming control of multi-million-dollar businesses and running things into the ground in just a short span of time. If such massive fortunes can be squandered so easily, it’s seriously doubtful that smaller operations like yours will fare much better.

Even if your successor doesn’t destroy your company, he or she can cause serious conflicts among your staff, clients, and family simply by managing the business radically differently than you. For this reason, simply naming a successor to take the reins in your absence is not enough.

 

Estate Planning Solution: A comprehensive business succession plan can help ensure your company doesn’t fall apart when you pass on. Beyond simply naming a successor, such plans provide stability and security by allowing you to lay out detailed instructions for how the company should be run.

From specifying how ownership should be transferred and providing rules for compensation and promotions to establishing dispute resolution procedures, an effective succession plan can provide the new owner with a roadmap for your company’s continued success following your death or retirement.

Secure Your Business, Your Legacy, and Your Family’s Future

If you haven’t taken the time to create a proper estate plan, your business is missing one of its most essential components. During our life & legacy planning process, as your estate planning lawyer, we will work with you to create a comprehensive estate plan to ensure the company and wealth you’ve worked so hard to build will survive—and thrive—no matter what happens to you.

 

Furthermore, every estate plan we create has built-in legacy planning services, which can greatly facilitate your ability to preserve and communicate your most treasured values, insights, stories, and mementos with the loved ones you’re leaving behind. By working with us, you can rest assured that your business and legacy will offer the maximum benefit for the people you love most.

 

You see, we’ve discovered that estate planning is about far more than planning for your death and passing on your “estate” to your loved ones—it’s about planning for a life you love and a legacy worth leaving by the choices you make today—and this is why we call our services Life & Legacy Planning. Contact us today to get started with a Family Wealth Planning Session.