I’m writing this article on May 4, commonly referred to as “Star Wars Day.” On this day, fans declare to one another, “May the Fourth be with you” — a pun on the classic catchphrase “May the Force be with you.” In celebration of this (unofficial) holiday, I’d like to focus on one of Star Wars’ most iconic stars.
On Dec. 27, 2016, the world mourned the loss of Carrie Fisher, who played Princess Leia in the “Star Wars” series. She succumbed to a heart attack at the young age of 60. Just one day later, her mother, famous actress Debbie Reynolds, passed away after suffering a massive stroke.
According to news reports, Fisher’s estate — comprised of real property, financial accounts, ownership interests in companies, jewelry, artwork, publicity rights, film residuals, automobiles, etc. — is valued somewhere between $5 million and $25 million. Reynolds’ estate was much larger, valued somewhere between $60 million and $85 million.
Neither woman was married, but they did have children. Reynolds had two kids, Carrie Fisher and Todd Fisher. Fisher had one daughter, actress Billie Catherine Lourd.
It appears that both Reynolds and Fisher had living trusts set up. Because information regarding trusts is private, it’s difficult to know exactly who the beneficiaries of each estate are. For the purposes of this article, let’s assume that each trust was written in a “standard” manner.
That would mean that the beneficiaries of Reynolds’ trust were her children. Since Fisher predeceased her mother, her share of Reynolds’ estate would probably go to her daughter, Lourd. Lourd was likely the beneficiary of Fisher’s living trust as well. That means that in a matter of two days, Lourd became the beneficiary of up to $70 million.
The case of Fisher and Reynolds may not seem relatable; most of us do not have tens of millions of dollars to bequeath to our children. However, it does serve as an important (albeit exaggerated) reminder of the issues that may arise with our estates.
These days, you never know what could happen. A drunk driver could crash into your car or you could suffer a heart attack at an early age. If you pass away unexpectedly, your children could suddenly come into a small fortune. If they are minors (or even in their 20s), then they may not be in a position to adequately and responsibly manage the wealth they have inherited.
Take Lourd, Fisher’s daughter, for example. She likely inherited 100 percent of her mother’s estate ($5 million-$25 million) as well as Fisher’s half of Reynolds’ estate ($30 million-$42 million). That’s a lot of money for a 24-year-old adult to handle.
If you own a home valued at $500,000, miscellaneous bank accounts totaling $100,000 and a life insurance policy for $50,000, then your children could be looking at splitting a $650,000 estate. What can you do to ensure that your children don’t blow the money all at once?
One option is to insert provisions into your living trust that instruct the Trustee to distribute trust funds to a beneficiary at a later (and hopefully more mature and responsible) age. You can state how and when a beneficiary will receive portions of their inheritance. For example, “Beneficiaries will receive 25 percent at age 25, 25 percent at age 30 and the remaining 50 percent at age 35.”
Alternately, you can give the Trustee broad discretion to dispense assets based on the beneficiary’s needs, particularly taking into consideration the beneficiary’s education, health, maintenance and support. The beneficiary could, for example, use his or her inheritance to pay for college tuition but not to buy a brand-new Ferrari.
Having these types of provisions prevent reckless, “spendthrift” behavior and give you peace of mind knowing that the beneficiary’s inheritance can be stretched over time and be put to good use. Of course, each person’s individuals needs and situations vary, so to determine what type of provisions suit you best, feel free to consult with an attorney.
Fisher and Reynolds left lasting impressions on the world, and their legacies as actresses, businesswomen and mothers have continued even though they are gone. From an Estate Planning perspective, if there is one thing we can learn from their unexpected deaths, it’s that your children’s inheritance can be safeguarded with the right provisions in place.
Finally, for those of you who are not “Star Wars” fans, feel free to join the “Dark Side” each May 5, which has come to be called “Revenge of the Fifth” — a play on “Star Wars: Episode III — Revenge of the Sith.” Happy celebrating!
Staci Yamashita-Iida, Esq., is an Estate Planning attorney at Elder Law Services of California. She can be contacted at (310) 348-2995. The opinions expressed in this article are the author’s own and do not necessarily reflect the view of the Pacific Citizen or JACL. The information presented does not constitute legal advice and should not be treated as such.