Aretha, Say It Ain’t So
My guess is by now you have heard the news of the recent passing of the legendary "Queen of Soul", Aretha Franklin, on August 16. The music world mourns the loss of this great talent to be sure.
It was revealed in court filings August 28 (that sure didn't take long), that unfortunately, Aretha died without a will in place. Like other celebrities before her, such as Prince and Amy Winehouse to name a couple, her estate is thus left to the courts to sort out, in what will likely be a very public proceeding.
Such proceedings not only reveal private information to the public but can also lead to lengthy delays, family feuding and costly court battles over who has rights to what is left, not to mention that the results often are not in accordance with the true wishes of the one who is no longer with us!
This situation is all too common among, not just the rich and famous, but the rest of us as well. The fact is, even for normal-sized estates, dying without a will (referred to as being intestate) often can cause tax and financial hassles that were avoidable, on top of the potential for family strife.
Plus, as I always say, whether you know it or not, if your will is not in written form, you really do still have a will of sorts. Dying intestate just means that your will is what the state law says it is. Chances are, that may not be to your liking!
I take this revelation about Ms. Franklin then as a call to action for the rest of us. You need to understand that it is important, at a minimum, to have some kind of will in place. And if privacy is a concern, you may want to combine that will with a living trust that spells out your wishes, since a probated will is public information, whereas a living trust document typically is not.
Equally important is that you keep it all up-to-date based on changing personal and financial situations.
Here are a few tips to make sure you have an effective will and plan:
First, seek professional help. Engage the assistance of a CPA and an attorney to do some estate planning, and to draft a will and other needed documents. An attorney can help you navigate the estate planning documents and a CPA is often best positioned to help with more complicated estate planning.
Having a professional prepare your plan eliminates any confusion if you have minor children (such as who will care for them), own significant assets or want to control the management and distribution of your property. Additionally, you will know that all your intentions are clearly communicated and recorded.
Second, periodically review your documents. From year to year, things change. It could be something to do with your financial situation, or perhaps changes in your family and relationships. Regular updating helps to ensure your closest relationships and wishes are accurately reflected in your plan.
Also, make sure you periodically evaluate who your executor (and trustee, if applicable) will be. Being an executor is a thankless, but an extremely important job with many responsibilities. You will want to choose someone you trust and who is ready to take on tasks such as taking care of any debts and distributing your property and money properly.
Additionally, make the time now! For some people, the idea of tackling this is so daunting they put it off, or perhaps struggle with facing the idea of their own mortality. However, it is important to make time to do this to ensure that your wealth is distributed how you wish in the event something happens to you.
I can also personally attest that one of the greatest gifts you can give your loved ones is having in place a well thought out and legally binding written plan. Having one eliminates a huge burden they would otherwise have on them during an extremely difficult time.
Now is the time to work with a professional to either write a will or review your financial affairs, making sure your will and other estate planning documents are up-to-date. Failure to do so could have devastating consequences in the event of your demise.