And the need for estate planning
I have reached an age where the Rock & Roll legends from my generation are dying. The past year saw David Bowie, Glenn Frey, Prince, George Michael, Chuck Berry, and J. Geils – among many others – join that great rock band in the sky.
It’s a topic that elicits lots of emotions and healthy debates among my clients and friends. What was the first concert you attended? Your first album? What was the best concert? Who is your favorite band? Who do you think is the best band of all time?
These questions provide for spirited conversations and provide for hours of banter among friends. But the question I ask, which tends to stop people in their tracks, is this: “Did you know that when Prince died, he didn’t have a will?”
It Happens a Lot
Everyone I know wants to make sure their assets are distributed properly after we pass away. But the reality is that almost 2/3 of adults don’t even have a simple will. I’m pretty sure I know why Prince didn’t have a will – like all of us, drafting a will forces us to think about dying. And no one likes to think about dying.
Nevertheless, I tell everyone I know that a will is critical for all of us, not just the wealthy. And a will is just one component of estate planning – a process that everyone should go through.
Estate Planning ABCs
The process of estate planning is often misunderstood – heck the term “estate planning” is off-putting. In the minds of many people, the term assumes wealth, land, businesses and heirs. So, single people or couples of modest means mistakenly believe they don’t “need” estate planning. However, planning for the disposition of one’s assets upon death offers everyone significant benefits.
Your Family Will Thank You
The greatest benefit may be in knowing that your wishes will be respected. Naming your heirs and relieving them of unnecessary costs and stress by carefully designating which assets they will receive is far preferable to having a court make such decisions. Because if you die without a will, then it’s up to the courts to decide who is in charge of your estate and how it gets divided.
Conservative estimates of Prince’s estate place its value around $500 million. And if Prince really didn’t have a will, then it’s likely to be tied up in probate court for a very long time.
Estate Planning Documents
In addition to designating your heirs, estate planning should include legal documents designed to protect your assets. This helps ensure your assets go to the people you care about instead of the government.
You may want to include a durable power of attorney and health care proxy in your estate planning documents in the event of mental or physical incapacity. In addition, a living will helps ensure that your doctors know how you wish to be cared for when considering certain life-saving measures in dire situations.
Find an Estate Planning Professional
Although you may think you can do your estate planning yourself, an estate planning professional will ask you tough questions you may not have considered. Could your elderly parents manage an inheritance if they were to survive you? Do you want to include your children’s spouses in your estate? If your estate is affected by the death of a child and/or divorce, how would these two painful situations affect the distribution of your assets?
Regardless of the level of your net worth, there are a number of reasons why you should consider working with an estate planning professional.
Call me so that we can take steps now to ensure your wishes will be followed and that provisions will be made for your dependents and loved ones.