The value of a well-drafted, updated will is in the spotlight again with news of uncertainty surrounding two-time Academy Award winner Gene Hackman’s estimated $80-million fortune. His three children could be in line to inherit even though they are not named in his will.

The sad circumstances of the legendary actor’s and his wife’s deaths are being exacerbated by uncertainty surrounding his financial legacy. This vividly illustrates how a last will and testament that has not kept pace with life changes can cause chaos, stress, drama and even lead to legal disputes for a family when a loved one passes away.

Why are questions being raised?

Hackman’s will, drafted in 1995 and last updated in 2005, named his wife of more than 30 years, classical musician Betsy Arakawa, as sole beneficiary. Her will named him as beneficiary but also included a clause that if they passed away within 90 days of each other, her estate must go into trust and be donated to charity once medical expenses are covered.

Showing how truth can be stranger than fiction, Arakawa (65) passed away from a rare virus, seven days before Hackman (95) died of heart disease while also suffering with severe Alzheimer’s, according to autopsy reports.

Questions have now been raised about the validity of Hackman’s will and whether his three children from a previous marriage could be in line to inherit the considerable fortune amassed from his film legacy.

What can we learn from this?

This highlights several crucial estate planning considerations. Capital Legacy National Manager of Succession Planning, Ken Newport, explains how this would play out in our local context under South African law.

1. Always name alternate heirs

This is a cautionary tale reminding us to make provision for the unlikely event that partners can pass away in close succession. So-called "mirror wills" between life partners are good practice, where two identical wills are drafted, but naming the respective partners as beneficiaries. However, it’s also important to nominate what’s known as ‘contingent heirs’ or ‘succeeding beneficiaries’ in case both partners pass away at the same time, or soon after each other. It could be a close family member, a trusted friend, or even a charitable organisation to avoid uncertainty and disputes if your partner passes away soon after you.

2. Review your will regularly

Life changes all the time. An outdated last will and testament can have serious consequences for loved ones left behind. Reviewing and updating your will at least once a year ensures that it reflects your current wishes and latest circumstances. Apart from reviewing your will once a year, it’s also a good idea to update your will when major life events take place, for example getting married, having or adopting a child, getting divorced, or when there are big changes to your financial situation.

3. If no beneficiaries are named, intestate succession will apply

In South Africa, only minor children (under 18) have a legal right to claim maintenance from a parent’s estate. Adult children do not automatically inherit unless named in the will. If no alternate heirs are specified in the will, the estate would be distributed according to the Intestate Succession Act meaning the deceased’s closest living relatives (such as children) could inherit.

4. Special clauses can play a role

Apart from naming Hackman as beneficiary, there was a clause in Arakawa’s will that if they passed away within 90 days of each other, her estate would go to a trust and be donated to charity after covering medical expenses. As Hackman died only a week after her, this clause did come into effect. His estate, however, would be subject to intestate succession, as he had not specified alternate heirs.

5. A living will has a part to play

Hackman had heart disease and severe Alzheimer’s and Arakawa was his primary caregiver. In scenarios such as this, a living will has a part to play, but it is important to remember that it serves a different purpose to a last will and testament. A living will sets out your medical treatment preferences if you become incapacitated and it can also communicate your choices for end-of-life care. It is a good idea to draft a living will when you are diagnosed with a dread disease. A living will has no impact, however, on inheritance and distribution of assets, so you should always have an estate plan in place too, including a last will and testament. In the context of serious illness, key estate planning considerations include setting up a trust for long-term financial security and appointing a legal guardian or signing a power of attorney for financial decisions.

The bottom line

Instead of being able to grieve the loss of their father and his long-term life partner, Hackman’s three children are being thrust into the spotlight, having to consult attorneys to make sense of the questions being raised about his will. Having a clear, regularly updated will prevents unnecessary disputes and ensures your loved ones are taken care of, and your estate is distributed according to your wishes. Irrespective of whether you own a little or a lot, having a will is the responsible thing to do and ensures overall peace of mind.

Written by Ken Newport, National Manager of Succession Planning, Capital Legacy