Hollywood Legend Lauren Bacall Leaves Large Estate and Two Potentially Large Headaches for Heirs
Legendary Hollywood actress Lauren Bacall died on August 12, 2014, leaving behind an estate estimated at $26.6 million and three children who face a couple of potentially serious problems that could have been avoided through effective estate planning.
Bacall, who was married to Humphrey Bogart and Sam Robards, passed away in her New York City apartment, which at a $10 million valuation constitutes a sizeable part of her estate. Bacall used a will as the governing document of her estate plan instead of a revocable living trust, so the division of her estate is public record.
Her will was made public a mere 10 days following her death because her children plan to auction off her artwork this fall. As a resident of New York, Bacall’s estate will be subject to both state and federal estate taxes. A trust left to her by Bogart will also be subject to tax based on its valuation.
Unfortunately, her estate only included $100,000 in liquid assets at the time of her death, so her heirs face a potentially serious liquidity problem when it comes to paying these taxes. This is probably the reason behind the rush to auction her artwork. Her family has only nine months from the date of her death to pay estate taxes.
Although Bacall directed in her will that her apartment be sold, there is no guarantee that it could sell in time to pay the estate taxes. Life insurance is one of the most common ways to ensure there is sufficient liquidity to pay taxes and other expenses.