German fashion designer Karl Lagerfeld had impeccable taste in
clothes but he also had an excellent solicitor.
When fashion icon Karl Lagerfeld passed away earlier this year, he left his Birman cat Choupette a sizable chunk of his $380 million estate and no-one batted an eyelid.
Contrast that with the messy public legal battles that often ensue following the death of wealthy celebrities and business moguls.
Some argue that Lagerfeld had no life partner or children to contest his will, but he did have a sister, nephews and a godson; any one of whom could’ve launched a legal action.
None of them did, proving that Lagerfeld had his financial affairs in order before he died.
He said as much in a 2018 interview with French publication Numero, confirming Choupette as an heir to his fortune and showing distain for “miserable Hallyday family stories” – a reference to the legal drama surrounding the estate of French musician Johnny Hallyday.
Unlike Hallyday’s death, which sparked a foreseeable legal maelstrom when he left everything to his fourth wife and their children, Lagerfeld protected Choupette by providing for her and other loved ones in his iron-clad will.
We know Lagerfeld had impeccable taste in clothes but he also had an excellent solicitor.
Unfortunately, it is estimated that half of Australians die intestate, and recent research suggests up to 70% of wealthy families fail to successfully transfer family assets.
This failure is not intentional. No-one wants their family to be torn apart after they’re gone, which is why it is important to think about estate planning early and engage an experienced solicitor.
Theoretically, from the time you’re 18, you should be thinking about an estate plan. Realistically, people should prepare a will once they’ve left their parents’ care and started to accumulate assets or become involved with a significant other – certainly by your mid-30s.
An expert solicitor can help you draft a comprehensive estate plan than pre-empts and addresses any potential issues. The process will need to include your family as well as other professionals such as your accountant and financial adviser.
A basic estate plan should include:
- A will;
- Power of attorney;
- Power of guardianship; and
- Death nominations for your superannuation.
More structured estate plans will include consideration for testamentary trusts.
Plans should be reviewed every time there’s a significant life event such as the birth of children or grandchildren, major asset purchases, changes in relationship status and illness, or at least every five years.
Wills and powers
Where wills instruct people about what to do when you’re gone, the powers protect you while you’re alive and become unable to make decisions about matters like property, money, health care and aged care.
A power of attorney provides for another person to make decisions on your behalf about your property and money. The role is essential in the event you’re decision-making ability is impacted by illness or injury.
Power of guardianship allows a person to make decisions about your medical care and lifestyle aspects, such as where you live. Where power of guardianship differs to power of attorney is that you must be able to act for yourself for the guardianship to be valid.
People often think there’s plenty of time to get their affairs in order but life is full of uncertainties.
Given second, third and even fourth marriages are increasingly common, binding financial agreements between previously married or partnered couples can help minimise the risk of a lengthy, expensive Hallyday-type drama.
That said, it doesn’t rule out a legal contest. In Australia, contestability of wills for family members and relatives is a legal right, which highlights the importance of resolving, or at least addressing, contentious issues within a family while you’re alive, if possible. ‘
Lagerfeld and his solicitor did this too. As Lagerfeld told Numero magazine, Choupette is an heir but “don’t worry there is enough for everyone”.