Tom Clancy’s estate can teach advisors a lesson about blended families.
Clancy was a best-selling author whose books were often turned into blockbuster movies. Consequently, he was a very wealthy man. This meant there were estate taxes to be paid.
When Tom Clancy passed away, his heirs included his wife and four children from a previous marriage. The bulk of the estate went to his late wife and the four children each received smaller shares. A recent Wealth Management article, titled “A Clear and Present Danger,” reports that Clancy’s wife is suing the executor over the estate taxes. She alleges that the executor misapplied Clancy’s will and that it was written such that estate taxes were not to come out of her portion of the estate. Instead, she alleges the estate taxes were to be paid out of the children’s portions.
The most interesting aspect of this lawsuit is that the executor who is alleged to have misapplied the will is none other than the lawyer who drafted the will.
One lesson to learn from this case is that when planning your estate, you can often decide whose inheritance portion should pay the estate taxes. However, when blended families are involved, that type of decision is likely to lead to acrimony. It should, nevertheless, always be clear to your heirs what your intentions are and why. At a minimum, it needs to be clear to the executor and to the person who drafts your estate plan.
In this case, it is possible Clancy told his wife that his intentions were to do one thing, but that one thing was not communicated to his lawyer.
Reference: Wealth Management (October 3, 2014) “A Clear and Present Danger“
