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Tuesday, February 13, 2007

Lessons from Anna Nicole Smith: The Problem with Delaying Getting Your Financial House in Order

Photobucket - Video and Image HostingBelieve it or not, there are some lessons in the death of Anna Nichole Smith, which occurred last week. In his blog, Professor Beyer gave a summary of what we currently know, and what we don't know, regarding her (at least, at this point) mysterious death:

She may not have had a will. It is unknown if Smith had a will; if she did, it is unclear what it provided. Therefore, if it is ultimately determined that she did not have a will, her assets would probably be disposed under the laws of intestacy -- this means that the money would be likely shared by her child, and husband (if it turns out that she was married, which is now an open question).

Was she married, or not? She may or many not have been married. The legal status of her relationship with Howard Stern is not clear.

She had an infant child. This speaks for itself.

She was likely quite rich -- and may have an expectancy. This also speaks for itself. Even though it is not currently a part of her estate, she had an expectancy from her deceased husband's estate in the sum of about $474 million -- give or take.

What does this tell us? Here are some ideas:

1. It pays to be a "gold digger"...(just kidding -- well, maybe not...).

2. Her child has no clearly designated guardian. If Anna was without a will, her child has no clearly designated guardian. Although it is ultimately up to the court to decide this issue, Anna may have forfeited an important legal right in failing to have an effective will in place, to the detriment of her daughter.

3. Even if a person is without assets, wills are important. Most of us do not have an opportunity to receive $474 million. However, even young, relatively "poor" families should have an effective will to ensure that their children for the purpose of appointing guardians for their children. Also, financial circumstances do, indeed, change over time.

4. An outdated will is little better. If Anna had an outdated will, it would have been little better that no will. An outdated will would not necessarily have stated her current wishes, and could very well have contradicted those wishes. For instance, she apparently had a very flexible attitude about relationships. The fact that she apparently had many changes concerning her wishes over a short period of time is an even more important reason for a current will.

5. It doesn't pay to wait. I'm sure that Anna did not plan on dying at the age of 39.

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