Actress Anne Heche died this August following a tragic car accident, leaving behind two young sons: Homer Heche Laffoon, age 20, and Atlas Heche Tupper, age 13.
Last week, in part one, we covered the way uncertainty around Heche’s estate plan is creating conflict among her loved ones and resulting in her estate going through the lengthy, expensive, and public court process called probate. Here in part two, we’ll discuss two additional issues related to Heche’s death and the results of her failure to work with a lawyer on her planning.
First, we’ll cover how Heche could have passed on her assets to her sons using a special type of trust that would have not only kept her affairs private, but would have protected her sons’ inheritance from their own creditors, a future divorce, and future lawsuits. Then, we’ll discuss the estate planning tools the late actress could have had in place to deal with her own incapacity following her accident.
From there, we’ll outline what you can learn from Heche’s story and the steps you can take to ensure your loved ones never need to endure a similar situation.
TRUSTS & PLANNING FOR MINOR CHILDREN
Outside of avoiding probate, trusts are a necessary part of an estate plan whenever you have a minor child. Minors are legally unable to inherit any assets until they reach the age of majority, which can be 18 or 21, depending on the state.
If a minor does inherit assets—as it looks like Atlas may—the court will require a guardian to manage the assets for the child until he or she comes of age. Then, when the minor reaches adulthood, the assets are distributed outright, without any protection from creditors and without direction from you.
To prevent her children from getting outright, unprotected access to their inheritance, Heche could have created a trust and named a person of her choosing as a Trustee to manage Atlas’s inheritance until he comes of age. And even though he’s an adult, Heche could have done the same for Homer’s inheritance.
LIFETIME ASSET PROTECTION TRUSTS
If Heche had built a Lifetime Asset Protection Trust into the trusts she set up for her kids, she could have not only transferred her assets to her sons upon her death or incapacity, without the need for any court intervention, she could have also ensured that those assets would transfer with protection from common life events like divorce, debilitating illness, serious accidents, lawsuits, and bankruptcy.
At the same time, the trust would have allowed Anne to establish clear guidelines for the Trustee. This would give Heche the ability to govern how those assets—which likely include the rights to films, books, and other intellectual property—should (and should not be) used to benefit her sons. In this way, Heche could ensure that her artistic legacy is honored, and Homer and Atlas could benefit from her work for generations to come.
Although a Lifetime Asset Protection Trust would have been ideal for Heche, such trusts are not for everyone. But contrary to what you might think, Lifetime Asset Protection Trusts are not just for celebrities or the rich. A Lifetime Asset Protection Trust may be even more useful if you are leaving behind a modest inheritance, because the smaller the inheritance, the more at risk it is of getting wiped out by a single unfortunate event, like a divorce or accident.
However, if your kids are going to quickly spend their inheritance on everyday expenses and consumables, building a Lifetime Asset Protection trust into your estate plan may not make sense. Meet with us for a Family Wealth Planning Session to determine if a Lifetime Asset Protection Trust, a Living Trust, or some solution is the right choice for you and your family.
INCAPACITY PLANNING: THE POWER OVER LIFE & DEATH
Beyond the distribution of her assets, Heche’s story also illustrates the critical importance of planning for incapacity. Estate planning is about more than just planning for your eventual death; it’s also about planning for your potential incapacity as a result of accident or illness.
While we don’t know if Heche had an incapacity plan, let’s look at how such a plan would have worked to help her and her family following her accident. After her accident, it’s been reported that Heche was on life support for more than a week, and then removed from life support and allowed to die, without ever regaining consciousness.
What we don’t know is who made the decisions regarding how long Heche was kept on life support, and at what point life support was removed. If she had a Medical Power of Attorney in place, Heche would have chosen the person to make the decisions on her behalf. If she did not have a Medical Power of Attorney, there could have been a conflict between her friends, her children, and other family.
Fortunately, there does not seem to have been any conflict in this case. In fact, it seems that there was clear agreement that Heche wanted to donate her organs, which did occur and likely saved the life of another human as a result. Generally speaking, directives regarding your wishes around decisions, such as organ donation, how long to be kept on life support, what to be fed in the hospital, and who should have access to you if you are hospitalized, are all outlined in a legal document called a Living Will, or Advance Healthcare Directive.
While these legal documents are the foundation of any incapacity plan, your plan may require other tools, such as a Durable Financial Power Of Attorney and a Living Trust. Meet with us to put in place the tools that are right for your unique situation.
LET ANNE’S STORY BE A LESSON
Celebrities don’t just entertain us, they educate us, too. Regardless of your financial status, planning for your potential incapacity and eventual death is something every adult should take care of immediately, especially if you have children. As we saw with Anne Heche’s tragic, too-soon passing, you never know when tragedy may strike, and with Life & Legacy Planning, you can save your family needless conflict, expense, and even embarrassing, unnecessary public exposure.
Beyond passing your assets to your loved ones when you die, Heche’s story highlights the vital need for incapacity planning to ensure you’ll be properly cared for in the event you suffer a debilitating injury or illness. To this end, if you’ve yet to plan for incapacity, or you have an existing plan that needs review, contact us and ask about a Wealth Planning Session.
Finally, remember that truly effective estate planning can ensure your wealth, assets, and legacy are protected and used to benefit your children, grandchildren, and great-grandchildren in strict accordance with your values. To ensure your estate plan offers your family this level of benefit, schedule a visit with us and ask about a Lifetime Asset Protection Trust today.
This article is a service of Casey D. Conklin. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Wealth Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office or visiting my online calendar to schedule a Wealth Planning Session and mention this article to find out how to get this $750 session at no charge. Or if you would like some more information you can schedule a 20 minute consultation with me.