Estate Planning: What Larry King Taught Us About Wills (and Divorce)
March 23, 2021 Author: Tess Downing, MBA, CFP®, Complete View Financial
Estate planning isn’t just for the rich and famous. If your assets include more than a 401(k) plan at your job and if you have children or dependents, you’ll want to look into estate planning with a qualified attorney in your state.
Estate law changes from state to state, and you want to be sure any documents you rely on will not be challenged in court. If found lacking, the probate courts could end up deciding the distribution of your estate, and it rarely – if ever – looks the way you’d want it to.
Besides, this planning involves much more than just a will. An estate plan may include a trust (if your situation warrants one). More importantly, it should include powers of attorney and healthcare proxies.
These are the documents that lay out the actions to be taken if you’re sick or gravely injured and are incapable of making decisions for yourself. And they determine who will take those actions for you – including who might become the guardians of your children.
Estate planning isn’t reserved for older people either. Covid-19 has taught us that life is more fragile than we imagined, as far too many people have discovered.
The Larry King Story
Now on to the rich and famous.
So how does Larry King enter a discussion about estate planning? Because his case has brought up some details that too few people think about. And there are valuable lessons to be learned.
Larry is known for having married several times: in fact, eight times to seven women. He and his most recent wife were married in 1997 and had two sons – now in their twenties. Larry and his wife Shawn drew up a complete estate plan in 2015. In 2019, after 22 years of marriage, Larry began divorce proceedings. But when he died of Covid-19 earlier this year, at age 89, the divorce was not final.
Divorce laws also differ from state to state. In some, you can alter estate plans after divorce proceedings have started; in others, you cannot. As Larry lived in California, he could have changed them, but he didn’t. So, in theory, the estate plans he and Shawn established should have been executed smoothly.
But – surprise – a note scribbled in Larry’s handwriting on a piece of paper has appeared recently, dated two months after he filed for divorce. And it met the California requirements for a “holographic” (or handwritten) will. It was in his writing, dated, signed, even witnessed. It clearly showed his reason for writing it (or “testamentary intent”) and left his estate to his five children by various wives, including the two with Shawn.
Shawn is decidedly contesting the holographic will. She will most likely use “testamentary capacity” (being of sound mind) as an argument, given Larry’s age and multiple health concerns. There are more details to the story, but they’re not relevant here.
The main lessons are that you should know your state’s laws around estate planning and divorce proceedings, as well as what is required if you need to write a holographic will at the last minute because you never got to the estate attorney’s office or because there’s something you need to change.
Let’s look at the example of Texas.
Handwritten Wills in Texas
In Texas, according to Statute 251.052 in the Estate Code, in addition to other requirements for a valid will, for a holographic will to be valid, the “testator” (or the person whose will it is) must:
- Write the will entirely in his or her handwriting, and
- Sign the will (or direct someone to sign it in his or her presence).
Contrary to a formal will, a handwritten will does not need the signature of witnesses.
Wills are always a little more complex than at first glance. For example, the statute does not apply to a written will executed in compliance with the laws of another state or country where the will was executed or where the testator had a place of residence when the will was executed or when the person died.
While wills are too important not to benefit from legal counsel – and the safest situation is undoubtedly to have a formally prepared estate plan – it’s good to know that a holographic will could be a viable option if done right.
Estate Planning and Divorce Proceedings in Texas
Since a marriage ends when one spouse dies, it’s logical that divorce is no longer necessary if it occurs during divorce proceedings. The survivor becomes a widower or widow.
If one of you dies during divorce proceedings where no final divorce has been granted, you are considered married at the time of the one spouse’s death. So, the surviving spouse is a beneficiary or heir to the deceased person’s estate. Estate planning documents stand, or the state’s intestate laws hold if there was no estate plan. (Pollard v. Pollard No. 05-08-01516-CV Court of Appeals of Texas, Fifth District, Dallas, of June 25, 2010, set the precedent https://www.avvo.com/legal-guides/ugc/death-of-spouse-while-divorce-pending).
On the other hand, neither of you may have remembered to change an existing will or trust when your divorce was final. But you cannot be a surviving spouse if the marriage has been dissolved. So, you would have no rights to the estate. (Source: Section 123.002 of the Estate Code: Treatment of Decedent’s Former Spouse https://statutes.capitol.texas.gov/Docs/ES/htm/ES.123.htm )
Again, the complexities are endless. And revisiting estate issues before or during divorce proceedings should not be undertaken without expert counsel.
Wrapping up
Divorce and death are two difficult topics. But, unfortunately, they are part of life.
As financial planners, Complete View Financial believes everyone benefits when issues have been thought through and when plans are put in place to ensure that wishes are fulfilled. If you think we could help you with that process, do call us for an initial consultation.