Farrah Fawcett, Hollywood star and beauty icon, passed away in 2009 after a battle with cancer. It is well known that her family life had its share of struggles, with alcoholism and drug abuse a regular headline around her ex-beau, Ryan O’Neil and her children, Tatum, Griffin and Redmond. Tatum O’Neil may be her best known offspring thanks to his work as a movie actor, however it is Redmond O’Neil, and how Farrah’s estate plan was used to manage his inheritance, which is instructive in how families dealing with their own set of challenges can plan for their loved ones.
Whether a child has a substance dependency, gambling habit, or other vice, has a mental impairment or disability, or simply is not good at managing their finances, special considerations should be taken into account when creating an estate plan that includes them as a beneficiary. Inheriting a windfall, whether large or small, may simply not be in their best interests if not managed correctly.
In Farrah’s case, her son Redmond was in jail on drug and DUI charges when she passed. His history of drug abuse made it clear that inheriting her $4.5 million estate free and clear would result in tragedy. Had she used just a simple will, her assets would have passed through probate and into Redmond’s hands. What he did with the money then would be anyone’s guess, but the smart money says he wouldn’t have been padding his IRA contributions.
Instead, Farrah set up a controlled trust for his inheritance, which would provide him a monthly allowance and pay for lodging expenses. It restricted him from accessing large sums, and also denied his father control over fund management, who had battled his own demons in the past. In effect, it created a lifetime benefit for Redmond rather than a here-today-gone-tomorrow windfall. For some individuals, this can be the best path to creating a stable lifestyle.
If you have special circumstances in your family, don’t leave it to chance—planning your estate effectively means being able to care for your loved ones even after you are gone. It is a lifetime gift.