On July 3, 1971, the world lost an enigmatic but talented force of nature named Jim Morrison. He was the lead singer and lyricist for The Doors, a band that produced a lot of groundbreaking hits that people have been listening to for more than five decades.
This year marks the 50th anniversary of his passing. His estate plan is instructive, so we will look at the mistake that he made in this post.
An Imperfect Plan
Morrison did take the time to execute a simple will, and he probably did this to make sure that his parents would not inherit his resources if he was to predecease them. He fiercely disliked them; this was demonstrated in some of his lyrics, and he conveyed his disdain in interviews.
His girlfriend, Pamela Courson, was named as the sole heir to his estate with one caveat. She would not receive the inheritance until 90 days after his passing because he thought that she may die of an overdose shortly after his death.
He named his brother and his sister as the alternate beneficiaries, so it is clear that he wanted them to inherit his resources if Courson could not. Pamela lived beyond the 90 days, but she ultimately died in 1974 at the age of 27, which is the age at which Morrison passed.
She did not have a will or any other estate planning documents, so her parents would be the heirs to her estate under the intestate succession laws. Morrison’s parents had other ideas, and they filed a lawsuit in an effort to pry the estate away from the Coursons.
They managed to work up a settlement deal before the case went to court. At the end of the day, Morrison’s estate went to people that he would have definitely disinherited if it was up to him.
What’s the Solution?
Morrison could have made sure that his siblings received the estate in the event of Courson’s passing through the utilization of a trust. Since Pamela was troubled, he could have named an outside professional fiduciary to act as the trustee of the trust.
Even if she was not struggling with addiction, his music and his likeness generated royalty income on an ongoing basis. Managing the estate was a complicated matter from a financial perspective. A qualified professional trustee would be equipped to manage the trust effectively.
From a succession standpoint, he could have named his brother and sister as the successor beneficiaries that would inherit the assets after Courson’s death.
In addition to this part of the equation, there is another major consideration when a wealthy person passes away. The federal estate tax looms large, and it was particularly devastating back in 1971.
There is an estate tax credit or exclusion that can be used to transfer a certain amount tax-free. The tax would potentially be levied on the remainder. Right now, it is $11.7 million, but it was just $60,000 back then. This tax carried a maximum rate of 77 percent.
Transfers that are consummated through the terms of a will are going to be taxed with no restraint. However, there are trusts that can be used to gain estate tax efficiency, and there are other ways to mitigate the damage.
The other negative consequence that we want to highlight here is the loss of privacy. Probate is a court process that will enter the picture in many situations when a will is used to transfer assets. It is admitted to probate, and the court provides supervision during the administration phase.
This is a public proceeding, so anyone who wants to find out what transpired during the process can access the records. This is why we know all the details about the Morrison estate, and of course, people that are involved could be willing to speak to interviewers.
When it comes to an ordinary person, there will be no interviewers, but the probate records would be readily available. This loss of privacy is disturbing in a general sense, and the information can sometimes cause hard feelings among interested parties.
When assets are transferred through the terms of a living trust, the trustee can distribute the assets outside of probate.
We Are Here to Help!
Our doors are open if you are ready to work with a North Aurora, Illinois estate planning lawyer to put a plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 630-568-8611.