It's a growing Hollywood trend ... tens of millions of dollars gone? Sue the guy who handled your finances! But, legally, who should shoulder the blame -- and more critically, pay the price -- when a celebrity once worth hundreds of millions sees most of it disappear? And what lessons are there for those of us whose net worth hasn't quite hit eight or nine figures?
Johnny Depp is the poster child for this dilemma after his reported net-worth of $200 million dwindled to a small fraction of what it once was. But Depp is far from alone. This summer, Alyssa Milano filed a $10 million lawsuit against her former business manager claiming financial ruin. And Lisa Marie Presley recently announced, through her attorney, that she is in the same boat, preparing to sue her former business manager for $100 million in losses.
The Depp lawsuit appears to be the most heated at the moment. Recently, Depp's former financial managers and advisors added a new lawyer to an already-ugly legal battle by filing to foreclose against two of Depp's houses, including his primary residence. The lawsuit alleges that when Depp was in deep financial trouble, his financial management company, TMG, came to his rescue with a five million dollar loan. TMG says it loaned the money on a short-term basis, to pay off another bank loan that was about to come due in late 2012. Depp agreed to sell off some his assets, including his beloved yacht (which he purchased for $10 million and spent another $8 million renovating) and repay TMG shortly thereafter, according to the lawsuit.
When most people think of Hugh Hefner, they picture the famous Playboy bunny logo, young and buxom blonde women by his side, and his ever-present robe and captain's hat. But people should also think of his smart business and planning sense. After all, Hefner started a unique business with $8,000 in 1953 and grew it into a massive global enterprise.
How Hefner used the resulting wealth to plan for his golden years and beyond was as unique and innovative as the way he lived his life. It certainly isn't a road-map for everyone, but it worked out well for him.
It started at least as far back as 2010, when Hefner and his second wife, Kimberley Conrad, finalized their divorce after a 12- year separation. At this time, records from his divorce pegged his net worth at about $43 million plus the value of his Playboy Enterprises stock and real estate. Those records also revealed his yearly income to be nearly $3.5 million, with his expenses topping out at just over $1.3 million annually.
The big open question, of course, was: What was the Playboy stock worth? In 2011, Hugh Hefner partnered with a private equity group to purchase the Playboy stock and take the company private, for a total package worth $207 million. When the dust cleared, Hefner ended up with a 37% ownership interest in the new company along with an employment contract that paid him one million dollars per year, gave him editorial control over the Playboy brand, and the right to remain in the famed Playboy mansion practically rent free for the rest of his life.
Princess Abigail Kawananakoa, known to her friends as Kekau, is true Hawaiian royalty. Now, a bitter court battle rages over the questions of whether she is mentally capable of managing her vast fortune and whether she is the victim of physical abuse and financial exploitation.
Princess Kawananakoa, age 92, is a direct descendant to the throne of the Kingdom of Hawaii. When the United States annexed Hawaii in 1898, it ended the reign of Queen Lili’uokalani, Kawananakoa's great-grand aunt. As the closest living relative, Kawananakoa is considered to be the heir apparent who would have assumed the throne if the monarchy had been restored.
Kawananakoa was also the beneficiary of a large fortune, thanks to her great-grandfather, James Campbell. Campbell, a 19th-century sugar cane industrialist who made his fortune in Hawaii, died in 1900 with an estate worth $3 million at the time. The Campbell Estate has grown since then, topping out over $2 billion in 2007 when the Estate was converted into corporate holdings. Kawananakoa inherited $250 million, mostly in the form of stock in the James Campbell Corporation. Today, her trust is estimated to be worth $200 million.
This trust fund is at the heart of the dispute, which pits her once-trusted attorney against her long-time domestic partner. The attorney, James Wright, petitioned the probate court to remove Kawananakoa from controlling her trust. His petition was initially granted by the probate court judge, but now is challenged in court. Wright alleged that Kawananakoa suffered an acute stroke leaving her unable to manage her health, self-care, or financial matters. Wright based his filing on the determination of two physicians.
When British pop star George Michael, 53, whose full name was Georgios Kyriacos Panayiotou, died on Christmas Day, 2016, he was discovered by his lover, Fadi Fawaz. Tensions have been building between Fawaz and Michael's surviving family members, which include his two sisters and his father, ever since that day.
According to reports from England, Michael's family members want nothing to do with Fawaz, to the point that he is not even welcome at the funeral. After months of delays before Michael's body was released, during which time it was determined he died of natural causes related to a heart condition, Michael's sisters are planning a small, private ceremony at a 30-seat chapel.
Fawaz has complained that the family left him out of funeral plans and felt that he was being blamed for George Michael's death, until the final determination of how he died was made public. George Michael's cousin said it was Fawaz who snubbed the family, not the other way around. Reportedly, Fawaz was paid more than £10,000 a month to be with Michael.
The real battle will be over George Michael's London townhouse, estimated to be worth £5 million. Fawaz has been residing in the house ever since Michael died, even though Fawaz reportedly is not named as a beneficiary in Michael's will. The family is said to be contemplating legal action to remove Fawaz from the home, which Fawaz claims he should be allowed to use.
Specifically, Fawaz believes that he had an agreement with George Michael to use the property for the foreseeable future. This apparently was based on a conversation, not a written agreement.
If that is the case, then Fawaz would not have a legal leg to stand on. In England, as in the U.S., agreements involving real estate must be in writing to be valid. So if George Michael did agree that Fawaz could stay in the home -- either as part of a business arrangement or due to the personal relationship -- that would not be binding on the Estate without a written statement that spelled out the terms.
But this doesn't mean that Fawaz will go away quietly. Because he has been living in the home, and has a claim that he is entitled to stay, the family would have to initiate legal proceedings to evict him. Once in court, Fawaz would certainly argue that the verbal agreement gives him the right to occupy it. And there is no telling what else Fadi Fawaz may say to complicate the matter. That legal proceeding could turn ugly and embarrassing for Michael's family.
While the specifics of George Michael's estate plan have not yet been made public, he reportedly divided his estate -- estimated to be worth in the neighborhood of £105 million (or roughly $130 million) -- primarily between his two sisters, through a will. If that is the case, then George Michael's last will must be publicly filed and processed through probate court, which will allow it to be easily obtainable by members of the British media or anyone else. (When wills are probated, they become public documents for anyone to read.)
So far George Michael's will has not been filed for probate because the family has focused on the funeral, which was delayed by the investigation into his cause of death. Once it's filed, we'll know for certain who is to receive what and what assets Michael had. We'll also find out if Michael wanted Fawaz to receive anything, including the right to stay in the London home.
George Michael's estate highlights why it is much better to rely on a living trust rather than a will. Living trusts, when properly drafted and funded during one's lifetime, can help families avoid probate court. They can also spell out specifically who receives what, when and how, without the necessity of probate court, where disputes are more common.
For example, if Michael did want Fawaz to be able to occupy the London home for a time after he died, that could have been spelled out in a private trust document, free from media scrutiny.
It's not only celebrities who benefit from detailed and thorough estate planning, including living trusts. Anyone who wants to protect their heirs from the increased expense, hassle, and public nature of probate court should talk to an estate planning attorney about whether a living trust makes sense for them.
The moment the lawsuit started, it was ugly. Sofia Vergara and Nick Loeb have moved well past ugly into uncharted territory in their courtroom battle that addresses views about life itself.
As we wrote after the case began, Vergara and Loeb's disagreement teaches an important lessons for anyone considering IVF or other mean of assisted reproductive technology. But there's a greater lesson now. When the courtroom is the backdrop for a relationship of love turned to hate, things can rapidly spiral out of control.
Johnny Depp and Amber Heard provided a good example recently. But even they -- despite dramatic accusations of spousal abuse, infidelity, blackmail, and more -- found a way to put their differences aside, reach a settlement, and end the fighting. Vergara and Loeb don't appear to be heading down the same path.
Neither is willing to blink about what should happen to the two frozen embryos that they had created while together as a couple. At the time, Vergara and Loeb tried to use In Vitro Fertilization to conceive a child. They split after one failed attempt, before trying for a second time. Two female embryos were left frozen.
At the start of the IVF process, Sofia Vergara and Nick Loeb both signed a form directive from the medical facility. This form included an agreement with different options for what would happen to the embryos if not implanted. They filled out the form and both signed it, indicating that if either of them died, the embryos would be thawed, which would destroy them. The embryos would only be implanted or otherwise used if both Vergara and Loeb agreed to it. If not, the embryos would remain frozen indefinitely.
So much trouble caused by such a simple concept. When you create a will, you decide who receives your assets after you die. If you don’t, the laws of the state you live in determine it. What happens when those laws aren’t too clear? Chaos. And the Prince estate is experiencing it in full force.
Maybe it’s fitting for the estate of the man who sang, “Let’s Go Crazy.”
Prince’s estate — reported to be worth as much as $300 million dollars before taxes — is tied up in the early stages of a long battle over who really are his heirs. Still? Didn’t the judge already resolve that months ago?
Originally, it appeared so. Dozens of people came forward claiming to be Prince’s son, daughter, or other relative. The DNA did not support them, and the judge denied their claims. He determined that Prince’s full sister and five half-siblings all qualified as heirs. He ordered the other two, a reported niece and grand-niece, to undergo DNA testing as well.
The death of Gene Wilder saddened Willa Wonka fans across the globe — not to mention fans of Blazin’ Saddles, Young Frankenstein, and many others. When his family issued a statement saying that Alzheimer’s disease claimed his life, it served as a valuable lesson. Alzheimer’s disease is a killer. As Wilder’s family aptly described it, it’s an “illness-pirate.”
Gene Wilder is far from the first famous actor to fall victim to Alzheimer’s. Jimmy Stewart, Peter Falk, Charlton Heston, and Rita Hayworth are just a few others. And of course the disease has attacked celebrities from many different industries, including Hollywood producers like Aaron Spelling, politicians like Ronald Reagan, singers like Etta James and Glen Campbell, and sports celebrities like basketball coach Pat Summitt and ball manager Sparky Anderson.
Sadly, there is no cure for Alzheimer’s disease. It always leads to death. While the official cause-of-death for most celebrities who suffered from the disease is usually listed as another affliction, such as a pneumonia or sepsis, Alzheimer’s disease is the real culprit for millions of Americans, causing the brain to decline until the body succumbs. Gene Wilder’s bout with it is notable because his family attributed his death entirely to Alzheimer’s disease, whereas in most celebrity deaths it is listed only as a contributing factor, if at all.