In January, the tragic deaths of NBA legend Kobe Bryant (Kobe) and his 13-year-old daughter, Gianna, shined a new light on the vital need for an estate plan and the importance of taking inventory to avoid estate plan oversight. At the time, little was known about the planning strategies Kobe put in place to protect and preserve his estimated $600 million estate for his wife, Vanessa, and his three surviving daughters, Natalia, 17, Bianka, 3, and Capri, 7 months.
Since then, court filings made by Vanessa have shed light on both the successes and failures of Kobe’s estate planning efforts. On the positive side, Kobe created an extensive estate plan, which included the Kobe Bryant Trust. It protected his assets, reduced estate-tax liability, and passed his wealth onto his family.
While the contents of the trust remain private, the court documents do provide a summary of the trust’s terms. Upon Kobe’s death, the trust was set up to allow Vanessa and her daughters to draw from the principal and income of the trust’s assets during Vanessa’s lifetime, with the remainder going to their children upon Vanessa’s death.
However, the trust lists Vanessa and his eldest daughters Natalia, Gianna (who died in the helicopter crash with her father), and Bianka as beneficiaries. His youngest daughter, Capri, was not included in the document. Reportedly, Kobe and his estate planning attorneys simply never got around to adding Capri to the trust before his untimely death at age 41.
A TRAGIC ESTATE PLAN OVERSIGHT
Seeking to fix this mistake, Vanessa Bryant and Robert Pelinka Jr., Kobe’s best friend, were named Co-Trustees. They petitioned the Los Angeles probate court to modify the trust by adding 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 held in the trust, which could be worth hundreds of millions of dollars.
According to the petition, the trust was created in 2003 after the birth of the couple’s first child, Natalia, and its intent was to provide for the support of Vanessa and all of the couple’s children following Kobe’s death. As evidence of this intent, the petition points out the fact that Kobe amended the trust to add daughters Brianna and Bianka after they were born.
Although it’s likely that the court will agree to the trust’s modification to include Capri, the fact remains that Kobe and his legal team made a major error by not updating his plan immediately following her birth. This mistake has undoubtedly cost Vanessa not only hefty sums of money, but it also eliminated one of the trust’s biggest benefits by failing to keep Kobe’s surviving family members out of court. It also exposed the estate’s details to the public, which should have been private.
And, the most unfortunate part of the whole situation is just how easily this oversight could have been avoided.
STAY UP TO DATE
It’s a popular myth that estate planning is simply a matter of creating the proper documents, filing those documents away for safekeeping, and only revisiting them upon the creator’s death. This is far from the truth.
Indeed, the oversight by Kobe’s lawyers illustrates why most plans—even those created by multi-millionaires and their lawyers—fail to keep families out of court. And, though Kobe’s family can easily absorb these costs, your family most likely won’t be able to without significant impact.
As Kobe’s case shows, even the most well-intentioned plan can prove ineffective if it’s not regularly updated. Estate planning is not a one-and-done type of deal—your plan must continuously evolve to keep pace with the changes in your family structure, the legal landscape, your assets, and your life goals.
And, unfortunately, this type of estate plan oversight happens all the time. In fact, outside of not creating an estate plan at all, one of the most common estate planning mistakes we encounter is when we’re called by the loved ones of a person whose estate plan wasn’t updated and no longer works. Yet, by the time they contact us, it is already too late.
We recommend you review your plan annually to make sure that it’s up to date and immediately modify your plan following events like births, deaths, divorce, and inheritances.
We have built-in systems and processes to ensure your plan is always up to date, so you won’t need to worry about forgetting anything.
MAPPING YOUR ASSETS
You should also create—and regularly update—an inventory of all your assets. Which includes digital property like cryptocurrency, photos, videos, and social media accounts. By doing this, your family will know what you have and how to find it if something happens to you, and none of your assets will end up in your state’s Department of Unclaimed Property.
We will not only help you create a comprehensive asset inventory, we’ll make sure it stays regularly updated throughout your lifetime. And with the COVID-19 pandemic still raging, creating such an inventory is something you should take care of immediately.
As Kobe’s sad story illustrates, death and illness can strike at any time, and even the most extensive estate plan can fail without the proper systems put in place. To ensure your plan works exactly as intended for the ones you love most, contact us, as your Personal Family Lawyer®, today to review and update your current plan, or create one if you have yet to do so.
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Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.