Perhaps uncommon but I think they do exist.
In the US, probate is an arduous, painful process like it used to be in the rest of the world before the rest of the world, country by country, reformed their probate law. In the US, our 50 states (which is the relevant jurisdiction here) generally have not made those reforms.
So, if the estate is large, you use a living trust to dodge probate. This is standard operating procedure for estates (over ~$ 1/2 or 1 million? Or all of them? Not sure.) Anyway here’s a cite for those who want one. You can also look up “Avoiding Probate” on Amazon or Barnes and Noble.The living trust workaround reduced pressure to reform probate in the US.
If there is a genuine issue with the wills, it will probably be settled out of court.
I don’t follow celebrity stuff too much, but I’d be very surprised if estate litigation is rare in that demographic. Anecdotally, I understand the Marilyn Monroe estate went almost entirely to lawyers. Prince died in 2016 and it was settled only in 2022 (though another case was filed in 2024). Ric Ocasek of the Cars died in 2019; the estate case was settled out of court in 2021. Frank Zappa’s estate was heavily litigated. Etc.
The celebrity press is not known for its factual accuracy or interest.
You know the answer. It’s because humans as a group are insatiably curious monkeys about literally everything. Somewhere, for some reason, some random schmo is going to be at least mildly curious about the size of the last booger you blew out of your nose and the consistency of the last poo you took.
Now multiply that by 1000x because this involves money. Multiply that by 10x because it is a lot of money. Multiply that by 10,000x because it involves a still loosely A-list celebrity. Multiply that by 100x because there was a mystery involved with a double-death. Multiply by 10x because of media insinuations/suggestions of juicy will/trust disputes - aka more drama.
It comes out to a lot of curiosity bait 
.
It says something about a person’s character (or their childrens’, or the nature of the dispute) if someone has $80M they no longer can use, and decline to give even a few million to their own children. OTOH, deliberately missing from all this is who gets the money from the trust which could make this moot.
IANATaxLawyer, but IIRC when property (other than primary dwelling) or assets change hands in Canada, capital gains are due on the fair market value. Whereas, AIUI in the USA, this is a means of moving real estate or assets like shares without ever paying capital gains on them. (Insert 1% comment here).
Another important issue - when my rich American relative died, he left his valuable mansion etc. to a trust, including a lifetime tenancy for his wife. A consideration of this is that it makes more sense that if the surviving spouse is quite old, they are more vulnerable to things like being scammed, or even ending up remarrying and the person inheriting from them is not the children, the building being taken for payment for senior care, etc. As it was, his wife survived for almost 10 years, living quite comfortably including her own pension, then when she died the children split the sale of the house.
My former boss had a similar issue - he brought some fairly hefty prudent retirement savings into his second marriage, she had significant debts. Both had children from previous marriages. No dispute - just wanted to be sure if he died first, that when she died his children as well as hers would get a share of the estate.
Upshot was that there was no way to guarantee this except a trust, and there was not that much money to make a trust practical. All they could do is sign a letter of intent - when the second one died, the estate would be split evenly among the children of both of them. As the lawyer said, nothing precluded either from re-writing their will later to change this, and remarrying again could also change this.
What was the purpose of the “letter of intent” if it didn’t bind anyone? If I tell my husband that I want my children to share in his estate when he dies, he knows what I want without any letter being signed - what changes by signing a letter?
Do you mean there was/is no way in Canada to leave some of your estate to your spouse and the rest to your children without a trust or was it more that he wanted to leave everything to his wife and have her estate split between both sets of children?
I think this, coupled with the fact that we don’t have an inheritance tax in Canada is why trusts like this are uncommon up here. I do have a family trust that holds the shares of my business, but the usefulness of family trusts for income splitting were largely restricted when Trudeau was first elected. The only real use now is to get access to multiple lifetime capital gains exemptions when I eventually sell the company.
Howard Hughes died in 1976 and the final settlement involving his estate was in 2010. Not only did he not set up a general trust (he had given the Howard Hughes Medical Institute a lot of money while he was living but that wasn’t really anything he could use), the bozo didn’t even have a will. A lot of lawyers made money off of this.
I assume it was particularly what it says - “intent” by both.
It could, for example, provide ammunition if it boiled down to a challege over undue influence, if say his wife changed her will a year before her death while one of her children was taking care of her, and evidence shows then she was getting confused, etc.
The lawyer advised them at the time that yes, it was not binding.
The principle estate would have been the house, in a land where house values are typically above $500K. Also, this covered the contingency if they died early, presuming that their retirement savings would not be eaten away much yet. (Boss had a 40-year defined benefit pension, which should have been substatial in his case, so possibly actually accumulating savings. Etc. )
Who knows? Perhaps his children are successful enough that they are already wealthy.
That’s why “Buy Borrow Die” doesn’t work in Canada for tax-free intergenerational transfers. At the “Die” point, all assets held by the deceased are deemed to have been sold, and capital gains taxes then apply based on the new market value. The tax has to be paid out of the estate prior to distribution to heirs.
At least, that’s what they told me a long time ago in the Bar course. Not to be taken as legal advice. Estate planning is a complicated area and you need to talk to a lawyer who’s proficient in it. As @FinsToTheLeft comments, there are ways to structure the transfer to spread out the taxes, but I don’t think there can be the complete immunity that appears to be the case in the US.
How do they handle poor records in Canada (and I’m guessing most of the rest of the world)? Let’s say you inherit 1000 shares of the Royal Bank of Canada from your rich uncle. You don’t know when they were originally purchased. How do they determine what was originally paid for the shares?
I don’t know the answer to that, but I assume the Canada Revenue Agency has an established protocol to deal with it.
My understanding is that if you don’t have proper records then the cost basis is $0 and it’s all subject to capital gains.
Hughes had severe mental health and physical health issues which became worse as he aged, badly affecting his decision-making ability. Insulting him for the symptoms of his severe health issues is not really fair, in my opinion.
From Wikipedia:
Eventually, the brain trauma from Hughes’ previous accidents, the effects of neurosyphilis diagnosed in 1932[159] and undiagnosed obsessive-compulsive disorder[160]considerably affected his decision-making.
If I had to guess (IANATaxLawyer) the simplest way would be for the CRA to simply say - your uncle must have bought before X date, or there would be records. (IIRC nowadays, most shares are held in accounts by the brokers, rather than running around as stock certificates?) So they’d take the value from the approximate time he must have bought them, perhaps.
“Uncle Bob was 95 years old, and back 70 or so years ago the shares were worth $5. We’ll accept that as a basis. But it’s doubled 3 times since then, so $5/8”.
Or, they go for zero. I suspect unless there’s a lot of shares, it really doesn’t matter. If we’re talking millions, then your lawyer will negotiate with the CRA. If Mulroney can get a 50% deduction and no penalty on tax owed on a brown paper bag full of money for “income he forgot to declare” years later, I suspect you can come to an agreement that does not tie everyone up in tax court.
My WAG for the US would be that you set up rules, the rules are published during a comment period, they get passed, and then things go back in forth in tax court. I’m not a lawyer either, but in the US I very much doubt whether there’s any negotiation with the IRS. Rather, the beneficiaries would try something, the IRS would respond (or not), and then the beneficiaries deal with the fallout. (Yes I did ask about Canada, and thank you. How does negotiation work in Canada: does it involve an exchange of letters?) Also, would you guess that Canada’s tax rules for this are published and available on a governmental website? I’m thinking of something like this. I’m just wondering about the level of transparency.
Paper records can be lost. Brokers can go bankrupt. It can make a big difference in cost basis depending upon when in the eg 1960 to 1985 interval the shares were originally purchased.
Also, not all assets are purchased through brokers.
Another WAG: some countries if they ever switched between systems established grandfather clauses.
ETA: doreen is correct below: I was wondering about what would happen in the US if the loophole were closed.
In the US, inherited stocks get a “stepped up” basis which means the basis is whatever the fair market value was on the day the person died. The gain between purchase and that death is not taxed.
I’ve never had to worry about it. I assume the person looking into your case (auditor?) will interact with you. If you show up with lawyers citing precedents and case and assorted (un)reliable documents, they will probably take it up the chain to determine whether they will go to tax court and fight, or what they will settle for. And then they settle for what makes sense as a trade-off. Presumably if you’re fighting them, you have some basis for your claim and the judge will allow that the penalty should not be severe.
IIRC in Canada, the penalty for evasion is you pay the tax, and then an equal amount as a fine for evasion. if it was a legitimate disagreement or confusion, you may not have to pay the fine.
If you’re Joe Schmoe by yourself, arguing that your car should be a business deduction, they are simply going to say “no - pay up or have your accounts frozen.” A lawyer would cost ten times what you should get in deductions.
I don’t imagine it’s much different in any country. The reason Biden hired a load of extra workers for the IRS was so that they could afford the time and money to do deep dives, and go to court if necessary, for more complex cases that would yield much larger payback from much richer people. Guess what’s happening to the IRS workforce today?