Aretha Franklin had a net worth of $80 million at the time of her death. Yet despite her fame, wealth, and lawyer’s attempts, she left no will or trust. She was divorced with four grown children, one who has special needs.
What are the consequences of leaving no will or trust for your loved ones?
If we look at Franklin’s case, it could mean that her four children won’t receive the inheritances as she wished, family squabbles over who feels entitled to what may delay payments, her estate could receive a large tax bill, it will have to address royalties and copyrights, and all this information will go public.
What’s more, if we look at the case of Prince, another accomplished artist who left no will, it’s been over two years since his death and his heirs have still not received anything from his estate.
Here is the issue: None of us knows when we’re going to die. And while we may not have the worth of Aretha Franklin or Prince, we surely don’t want what we do have being spent away on unnecessary court proceedings and legal fees.
So . . . what do you do?
1. Get a will, at the very least.
This can prevent disputes among heirs. It names an executor of the will and guardian in the case of minor children. Keep in mind, however, that even with a will in place, the estate must go through probate in order to transfer property to beneficiaries.
2. Or get a living trust.
In the case of Franklin, this could have minimized the estate’s tax burden, retained privacy, passed assets to the heirs quickly, and prevented family disputes. Done correctly, a living trust avoids probate.
3. Set up a special needs trust for a disabled child.
This trust is not subject to probate court and allows your child to receive both your funds and governmental benefits.
Of course, everyone’s situation is different. Consult an estate attorney to figure out what is best for you and your family.
Nobody likes this process. It forces us to answer some tough questions, confront some rough realities, and put it all on paper. That may be why only 42% of US adults currently have a will or living trust. They think they’re going to live well into their 80s or 90s and that there’s plenty of time. But here’s the cold, hard truth: we don’t know when we’re going to die. Why not get a will or trust done now? When your time comes, whenever that may be, your loved ones will be grateful you did.