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While it may seem like a distant memory, it has been a little over a year since the legendary Kobe Bryant and his 13-year-old daughter, Gianna, tragically passed away in a helicopter crash.
Kobe’s untimely death at the young age of 41, highlights just how critical it is for every individual to not only develop an estate plan ensuring their loved ones are properly protected, but to ensure the documents are swiftly updated to reflect recent life events.
Bryant’s earnings, between his salary and endorsements during his 20-year career with the L.A. Lakers, are estimated to be roughly $650 Million. Kobe had a comprehensive estate plan in place. His estate plan included a trust to not only protect his assets, but to reduce his potential estate tax liability and ensure his wealth is properly passed on to his family. Kobe’s trust was created to allow his wife and daughters to draw from the principal and income of the trusts’ assets during his wife’s lifetime and then upon her death the remainder to go to their children.
Kobe’s trust lists his wife and only three of his four daughters (Gianna, Natalia, and Bianka) as beneficiaries. Unfortunately, the trust document did not mention his youngest daughter, Capri, who was born just six months before Kobe’s death. Suffice it to say, Kobe and his lawyers never got around to adding Capri as a beneficiary of the trust before his tragic passing.
Due to this oversight, the co-trustees of his trust had to petition the Los Angeles probate court to modify the trust by including Capri as a beneficiary with equal rights as her sisters. Unless the court agrees with the petition, Capri will be ineligible to inherit her share of the family estate. Although, it is likely the court will agree to the trust’s modification to include Capri, the fact remains that Kobe and his legal team made a tragic error by not updating his plan immediately following Capri’s birth. This mistake will undoubtedly cost the family hefty sums of money in attorney fees and court costs. Ultimately, this oversight eliminated the trust’s biggest benefit of avoiding probate to preserve estate privacy. This misstep could have easily been avoided by simply adding Capri’s name to the document following her birth.
It is a common myth that estate planning is simply a matter of drafting the proper documents, storing these documents away for safekeeping, and only reviewing them upon the creator’s incapacity or death. This is far from the truth; Kobe’s case clearly illustrated that even the most well-intentioned plan can prove ineffective if it is not frequently updated. Just as our lives evolve, so should our estate and financial planning roadmaps. Another common mistake is not developing a comprehensive inventory of your assets; this should include digitals assets like login credentials, photos, videos, social media, etc. Plans need to reflect the changes within our family structure, assets and goals; as well as, modifications in tax and legal environment. We recommend reviewing your estate planning documents and financial plans at least annually to make sure they are current and include revisions following life events such as births, deaths, divorce, and inheritances.
We would be happy to review your estate planning documents to make sure the appropriate plan is in place to meet your needs and desires.