In addition to being a genius, the Texas-born billionaire entrepreneur, investor, aviator, engineer, film producer, and director Howard Hughes was a controversial figure due to his eccentricities and obsessions (he is often associated with obsessive-compulsive disorder). Within that context, one of the most notable aspects of his story was his death—aboard a plane in Mexico en route to Houston—surrounded by uncertainty about the exact moment of his passing. Above all, because following that event, which occurred 50 years ago—April 1976—a wave of legal disputes erupted over his fortune, estimated at $1.5 billion at the time—and $2.5 billion a few years later when, in 1983, it was divided among his 22 cousins. It stands as a paradigmatic example of the consequences of failing to leave a clear will at the time of death, something wealth management experts increasingly warn about.
“At his death in 1976, without a valid and recognized will, his fortune was left in legal limbo. For years, hundreds of people claimed inheritance rights, more than 30 false wills appeared—including the famous ‘Mormon will’—and one of the most complex succession battles of the 20th century unfolded. It was not until 1983, after years of litigation, that an agreement was reached to distribute the fortune among distant relatives, with a substantial portion allocated to the Howard Hughes Medical Institute,” recalls the case Berta Rabassa, lawyer and partner at BPP Legal, a firm integrated into Grupo Pérez Pozo. Beyond the extraordinary nature of the case, she argues, its lesson is deeply relevant today, “since the lack of planning can completely distort a person’s wishes regarding their own wealth.”
And not only their wishes—it can also add pain to pain: “It may sound cliché, but the ultimate goal is not to add pain to pain. When a family goes through a divorce, a death, or incapacity, there is already a certain level of suffering. If we add uncertainty, costs, and disputes associated with the lack of planning, we are introducing another layer of hardship to what that family is already experiencing,” says Martín Litwak, CEO of UNTITLED.
Greater risk in a global world
Moreover, the risk of not making a will and defining the beneficiaries of one’s wealth is even more evident in a globalized world with international activity. “In an increasingly globalized economy, where people live, invest, and establish ties across different countries, estate planning has ceased to be a domestic issue and has become a matter of international scope,” the expert notes, adding that it also represents “an unnecessary legal risk.”
What are the potential consequences? First, family uncertainty, experts say, but also exposure of the estate to complex, divergent, and sometimes clearly unfavorable regulations. “The consequences are not merely theoretical. They depend on the country where the person dies, the nationality of the deceased, the location of the assets, and the applicable international agreements. In this context, the absence of planning can result in significant financial losses, prolonged family conflicts, and, in extreme cases, direct intervention by the State as heir,” explain representatives from Grupo Pérez Pozo.
At the international level, the problem is exacerbated by differing regulations between countries: in the United States, for example, the absence of a will may lead to the application of intestacy laws of each state, with highly significant tax and estate consequences. In certain cases, especially when there are no clearly identified direct heirs, a substantial portion of the estate may end up in the hands of the State.
In other countries, such as France or Germany, there are strict forced heirship systems that limit freedom of disposition, while in the United Kingdom there is greater testamentary flexibility. Spain, for its part, combines elements of both models, with special protection for forced heirs, the expert explains.
Death in different countries
But what happens if a person without a will does not die in their country of origin? This is where conflicts of law arise, according to Rabassa. Which legislation applies when a Spanish national dies in the United States with assets in multiple countries? What happens if there are multiple wills executed in different jurisdictions? For Litwak, the consequences of dying in a different country (for example, being Spanish and dying in the Americas, or Latin American or American and dying in Spain, or a Latin American dying in the U.S.) are numerous and varied. First, if heirs do not have a deep understanding of the deceased’s assets, assets may be lost, he warns.
Second in importance is inheritance tax, which functions very differently from one country to another but can reach up to 40% of the estate if efficient planning is not carried out. “Third, I would include the delays involved and the fact that unplanned successions are public,” he explains. Finally, if a person does not assign their assets to heirs or beneficiaries through wills, trusts, etc., “it often happens that instead of receiving assets individually, they end up becoming ‘partners’ in certain assets, which is a recipe for problems when there are differences among heirs in terms of needs, wealth, urgency, and so on.”
Rabassa points to greater regulatory coordination in Europe, which can help in these cases: “The European Succession Regulation has represented an important step forward within the European Union, allowing, among other things, the choice of the applicable national law. However, outside this framework, coordination remains limited.”
For Litwak, “it is always good to have default rules that supplement the will of the parties and regulations that establish in a simple way how to enforce a document issued in a third country,” but in his view, the key issue in the Americas is awareness and education; “only then will it be possible for anyone who has an asset they do not intend to consume in the short term to plan.”
More discipline among large fortunes?
In general, experts say estate planning is not done correctly, but there is also greater discipline among larger fortunes. “In many cases, it is not done at all. And when a person or family does plan, they often make basic mistakes, such as not working with international advisors and assuming that the rules of the country in which they reside are the same as those of other countries where they have assets or heirs,” warns Litwak. Another very common mistake is failing to update estate planning after life events that change circumstances, such as relocation, divorce, or the birth of a new heir, he adds. And even when everything is done correctly, communication may fail, which is another fundamental aspect of wealth structuring, the expert concludes.
At the same time, although oversights persist, it is clear that over the past 20 years estate planning has become more widespread, with more people engaging in it, particularly among high-net-worth families. “In any case, it remains a minority practice in Latin America, as it is a region where it is very difficult to talk about money and the long term, for multiple reasons,” says Litwak.
The importance of planning
Grupo Pérez Pozo confirms how this reality contrasts with the lack of foresight among many individuals and business families, and argues that estate planning must be approached with a comprehensive vision, anticipating international scenarios and properly coordinating different legal systems. It is not only about drafting a will, they say, but about designing a strategy that protects wealth and ensures its transfer according to the owner’s wishes.
“The conclusion is clear: in a global world, it is not enough to have wealth; it is essential to plan its transfer. A will is not just a legal instrument, but a tool for foresight, security, and responsibility. It allows for the organization of wealth according to the testator’s wishes, reduces the tax burden, prevents conflicts among heirs, and, above all, provides certainty at a moment that is already delicate. Postponing this decision is, in reality, delegating it to others: to legislators, to courts, and ultimately to systems that do not always reflect personal wishes. In light of this, well-advised estate planning with an international perspective is not an option but a necessity. Because, ultimately, not making a will does not mean not deciding—it means letting others decide for us,” she concludes.
