One of the Hood Law Group’s areas of specialty is the focus on a well thought out and structured estate plan to account for the inevitable event of one’s passing.
Unfortunately, end of life planning tends to be an area many people tend to “put off” for one reason or another, whether it be prioritization of more pressing matters, reliance on a simple will or an internet package plan without the benefit of legal counsel, or allocation of funds elsewhere. As our firm also handles many probate matters when someone passes, we see time and time again the ramifications of either poorly-planned estate plans or lack of a plan altogether, resulting in significant and unnecessary expenses and family turmoil for the surviving members of the family.
It’s been over a month since the passing of the musician Prince, who failed to execute a will or any estate plan to determine what would happen to his fortune after his death, who would manage his affairs and other issues to account for after one’s death. This has been interesting news the past few weeks as we are seeing potential heirs coming out of the woodwork claiming entitlement to a share of the estimated $300 million estate.
When a person dies and a will has been properly executed during their lifetime, it will spell out who will serve as the executor and who will receive the decedent’s assets, in what allotments, etc. The matter is addressed through the probate court and although there is a clear process to follow, time and expense can occur that can be otherwise minimized through the use of a Revocable Living Trust created during the person’s lifetime (which also has the benefit of keeping the decedent’s distributions to beneficiaries private). In addition, wills may be contested for lengthy and expensive probate court disputes. However, a will does serve to avoid the disaster of intestacy.
So, what happens when a person dies without a will, such as the situation with Prince? The probate court will appoint a person to serve as administrator. In most states, any person of interest can apply to be an administrator. This includes your creditors such as a mortgage company or credit card company. Typically the next of kin will be appointed, but courts may have discretion for appointing any party of interest.
The result of passing without a will is sure to be a mess, especially with a considerable fortune. If there is one thing to learn, it’s that everyone should have a plan in place, preferably for most a Living Trust, but a simple will has the advantage of avoiding many unintended consequences. It reduces the chance that controversy and family infighting will occur, as well as many unintended consequences of probate in intestacy. In the absence of a will or other planning, the disposition of assets are controlled by state statute that may not be in accordance with the wishes of the decedent.
Now we are seeing people claiming to be descendants of Prince, including a local Kansas City man who claims to have been fathered by Prince from a chance encounter with his mother in the late 1970s when he was on one of his first tours. If proven true, Prince likely had no connection to this person and may not have wanted any portion of his estate to go to this man.
Don’t let the dollars involved with Prince’s estate dissuade you from the need to have proper planning. You can’t choose your beneficiaries without a will. You don’t get to choose who will manage your affairs. You don’t have the advantages of careful planning to reduce or eliminate inheritance and/or estate taxes or income taxes. The state statutes will control everything. You will have no control over disposition or other matters.
Do your intended beneficiaries a favor, and yourself, and ensure you have a proper estate plan in place. Whether a basic will or a carefully drafted Living Trust, make life easier for your extended family and/or intended beneficiaries, as well as giving you peace of mind and more control upon your passing.
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*This post was originally published on May 25, 2016
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