Just a short three weeks ago, the world unexpectedly lost one of its greatest musicians and most unique entertainers in Prince. Whether you follow music closely or not, most everyone has a favorite Prince song. Prince grew up in a musically talented family. His parents were John Nelson, a musician with the stage name Prince Rogers, and Mattie Shaw, a jazz singer. Prince began teaching himself how to play the guitar, drums and piano at age 7. Needless to say, Prince was naturally gifted. Every instrument he touched, he mastered. In Prince’s first album, “For You”, which was released in 1978, he played 27 different instruments. From there, he never slowed down. Throughout his life, Prince produced 39 studio albums, 4 in his last 19 months alone. Prince was so consumed with music that he would spend days in his studio without sleeping. While Prince hardly failed in life, he did fail to plan for his unexpected passing.
We can all agree that planning for life after death is very uncomfortable. We all hope to live forever but, in reality, we never know when our clock will stop. Prince’s family has yet to find a will, or any other estate documents, to outline his end of life wishes. Currently, 51% of Americans age 55 to 64 are following down the same path as Prince. Don’t be like Prince!
If you die without a will, there’s no guarantee who will inherit your assets. Generally, if you are married with kids, your surviving spouse and children will inherit your assets, but why take the chance? If you have a minor child and no surviving spouse, the court would choose their guardians. As a parent, wouldn’t you feel more comfortable appointing your children’s guardian beforehand? In addition, without proper planning, your estate will go into probate court which is costly (as much as 5% or more of the estate value) and time consuming for all parties. Mourning the passing of a loved one is hard enough. Your family shouldn’t have to experience the probate court process as well.
Establishing an estate plan with the proper documents is extremely important. Essentially, your estate plan is an instruction manual on how to handle your assets and end-of-life needs. A minimum estate plan should have at least four documents, which should be prepared by an estate attorney:
- Last Will & Testament – This document addresses how your assets will be distributed upon your passing. This document will allow you to assign a guardian for your minor children.
- Health Care Power of Attorney – This document allows you to appoint an agent to make medical care decisions should you become incapacitated.
- Living Will – This document directs your physician to either continue life or discontinue life-sustaining procedures if terminally ill or permanently unconscious.
- Durable Power of Attorney for Property – This document allows you to appoint an agent to manage your assets should you become incapacitated.
For many people, a living trust may be more appropriate than just having a will. A living trust helps administer your estate and can also help you avoid probate. A living trust also allows you and your family to remain in control of your assets while living, even if you become incapacitated. If you become incapacitated with only a will, the court may easily take control of your assets before you die. This a big concern for many families. Executing the appropriate documents is only half the process. You will also need to make sure all assets are titled properly and beneficiary designations, both primary and contingent, are what you want!
A common misconception that many people have is that their estate isn’t large enough to trigger an estate plan. Whether your estate is worth $300 million, like Prince, or a couple hundred thousand, estate planning is essential for everyone. The absence of estate planning can set the stage for conflict among heirs. Other famous people who left without a will in place include: Jimi Hendrix, Bob Marley, Sonny Bono and Abraham Lincoln.
Here at DWM, we are not legal experts, but we do get involved with our clients’ estate planning and collaborate with their estate attorneys in this very important matter. The information we provide is based on our experience and knowledge in these areas. As part of adding value to our clients, we prepare an estate flow analysis to help clients understand the course of their estate and to make sure the titling and beneficiary designations of each asset are updated to match the clients’ wishes and avoid or minimize probate. If you are looking to begin the estate planning process or review and update your current situation, give us a call, we’ll be happy to help.