You might know that pop star Katy Perry has been in a dispute over her $15 million Montecito mansion for years.<\/p>\n
Must Read<\/p>\n
Part of the dispute involves Perry\u2019s team saying her manager legally purchased the home from 84-year-old Carl Westcott, founder of 1-800-Flowers.<\/p>\n
Westcott\u2019s family, on the other hand, argues Westcott was recovering from major surgery, on pain medication and diagnosed with Huntington\u2019s disease at the time of the sale, impacting his mental capacity to understand the agreement.<\/p>\n
Nevertheless, Perry\u2019s team is now seeking millions of dollars in damages, while Westcott\u2019s son, Chart Westcott says, \u201cAn apology would be nice,\u201d according to the New York Post [1].<\/p>\n
When elderly loved ones sell property without having protections in place, it can make a major dent in family wealth. So what exactly happened and could it have been avoided?<\/p>\n
What everyday families should know<\/p>\n
In Perry\u2019s case, it all came down to one side believing the contract was binding<\/a>, while the other thought the seller didn\u2019t have the capacity to make it in the first place.<\/p>\n Perry\u2019s team is looking for over $5 million in damages, claiming lost rental income during the years-long court battle and for repairs allegedly needed on the property<\/a>.<\/p>\n This legal fight isn\u2019t unique to celebrities<\/a> and million-dollar mansions<\/a> either.<\/p>\n Baby boomers own 41% of U.S. homes<\/a>, according to the Mortgage Bankers Association [2], and as this generation ages, more families will face similar struggles over their elderly loved ones’ estates.<\/p>\n \u201cThe most expensive thing about selling the family home isn\u2019t the list price; it\u2019s the risk of a battle,\u201d says Kristen Herhold of Clever Real Estate [1]. Herhold says she often sees similar legal troubles to the ones Perry is having in regular real estate deals with ordinary people.<\/p>\n Read more: Rich, young Americans are ditching stocks \u2014 here are the alternative assets they’re banking on instead<\/a><\/p>\n Estate planning isn\u2019t just paperwork; it\u2019s strategy. According to the American Bar Association [3], it means sitting down with the pros who know your finances, your family dynamics and your long-term goals. From lawyers and accountants to financial planners, insurance advisors, bankers and brokers, it often takes a full team to protect your assets and make sure the wishes of loved ones stick.<\/p>\n How to protect your assets<\/p>\n The National Council on Aging has a list of considerations to weigh when estate planning and that includes some simple but powerful basics [4]:<\/p>\n Write a will. This decides who gets what, names an executor and appoints guardians for kids. Easy DIY options exist online, though lawyers can help with complex cases.<\/p>\n Consider a living trust. A trust keeps assets out of probate<\/a>, offers privacy and helps if you\u2019re incapacitated. It\u2019s a lifesaver for families with multiple properties or complicated dynamics.<\/p>\n Set up powers of attorney. Financial or medical (regular or durable) POAs ensure someone you trust can step in if you can\u2019t handle money, health, or legal decisions yourself \u2014 something that may have been helpful for the Westcott family.<\/p>\n Get organized. From birth certificates to property deeds and insurance policies, keep everything in one safe spot for your executor and family.<\/p>\n Check beneficiaries. Retirement accounts, life insurance and bank accounts may bypass your will entirely, so make sure to keep everything current.<\/p>\n List assets and debts. A master list of what you own and owe makes settling your estate faster and smoother.<\/p>\n \u201cHaving the proper estate planning documents in place with the appropriate fiduciaries is crucial,\u201d says Aimee Arce, an associate in the Trust & Estate practice at Fox Rothschild LLP [1]. \u201cWithout these important documents, your loved one may need to be deemed incapacitated by the court under these circumstances, before you have the power to make decisions on his or her behalf.\u201d<\/p>\n Even if you know what to do, families often struggle with the timing of when to step in legally, if the estate planning<\/a> hasn\u2019t been done properly.<\/p>\n You don\u2019t need to assume decision-making the moment a loved one shows signs of aging. But when health issues, medication, or cognitive decline start clouding judgment, it\u2019s time to think about getting legal authority in place.<\/p>\n If there isn\u2019t a plan in place, the only way to gain control is through the courts. That usually involves a guardianship or conservatorship proceeding, where medical evidence and testimony must prove that the person can\u2019t manage their own affairs. It\u2019s a serious step and the U.S. Department of Justice calls it a last resort because it restricts the individual\u2019s independence [5], but it ensures no one can force through a sale that jeopardizes a family\u2019s biggest asset.<\/p>\n For most families, the home isn\u2019t just where memories are made; it\u2019s also the single largest asset and source of wealth. If it\u2019s sold under sketchy circumstances, the fight over that sale can quickly drain the very inheritance that heirs are hoping to preserve.<\/p>\n You don\u2019t need a $15 million mansion to end up in a legal nightmare. By putting powers of attorney and estate plans in place early and by stepping in when necessary, families can avoid court battles, protect their wealth and prevent years of costly conflict.<\/p>\n What to read next<\/p>\n Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.<\/a><\/p>\n Article sources<\/p>\n At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.<\/p>\n We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines<\/a>.<\/p>\n [1]. New York Post<\/a>. \u201cKaty Perry\u2019s legal fight is a warning for those selling or inheriting a family home\u201d<\/p>\n [2]. Mortgage Bankers Association<\/a>. \u201cWho Will Buy the Baby Boomers\u2019 Homes When They Leave Them?\u201d<\/p>\n [3]. American Bar Association<\/a>. \u201cEstate Planning Information & FAQs\u201d<\/p>\n