In the past few years we’ve heard many stories of legendary musicians such as Prince and Aretha Franklin who have passed with no official, legally binding Will and no estate planning, but a massive estate left for the courts and family members to slice and dice based on what their idea of what is fair. As a result, much of the deceased celebrity’s hard-earned estate may end up going to the IRS and the lawyers for the multiple contesting claimants rather than the loved ones and charities the celebrity cared about the most.
While this kind of wealth doesn’t typically require life insurance policies to replace income, a Will and sound estate plan is required so when death comes knocking everyone you love gets what you want them to have.
In some cases, like Aretha Franklin, the family may be dealing with what’s called a “Holographic Will” or a handwritten will. According to Black’s Law Dictionary, a holographic will is defined as “A will or deed written entirely by testator or grantor with his own hand and not witnessed (attested)”. Black’s goes on to say that not every state will recognize a holographic will and can “[…] refuse to recognize any will not meeting the formal statutory requirements […]”. Clearly, a holographic will is not the most responsible way to manage a huge estate.
So let’s take a look at some quick tips that can help you prepare for your departure.
- Do you have an inventory of all your assets and liabilities? Thoroughly understanding the state of your assets and liabilities will help you, your estate planning attorney or financial advisor better plan for your eventual departure. Additionally, with all of the details, you will be able to dive deeper into potential challenges ahead and then responsibly solve for them.
- Who’s getting what? When planning for your departure, you’ll want to choose a beneficiary or beneficiaries – more than one is not only acceptable but common. Especially with larger more complicated estates. You’ll want to discuss who will get what and how much. Additionally, there are tools that can be leveraged to ensure your beneficiaries use the gift the way you intended. For example, if you would like your mother to receive a large sum of money, but she’s a spendthrift and you don’t want her to blow it all. You can use a trust to give your mother a stipend…monthly, quarterly or annually. It’s up to you.
- Who will manage your legally binding wishes? You’ll want to pick an executor for your estate. This person will make sure all of your wishes are followed to the letter. That person can be anyone of your choosing. You may also state in your will that the executor can or should hire an attorney (to be paid out of the estate’s assets), especially if your estate is large and complicated.
- What if you unexpectedly become ill or incapacitated? Regardless of how large your estate is, it’s crucial to have a plan around your health. You’ll want to choose a power of attorney and outline a health care directive. This person will manage your medical wishes should you become incapacitated. The person you choose will be empowered to make medical decisions on your behalf such as do not resuscitate directives.
The best-laid plans, and intentions, can sometimes go awry. The responsible way to manage your estate is to begin with a professional. While it’s always a good idea to talk with friends and family for a referral, you can also peruse the American Bar Association’s interactive state-by-state lawyer referral directory.
AccuQuote is in the business of protecting families and that means offering guidance even when we don’t stand to benefit. Because for us, it really is about protecting your kids, your spouse, your mom, your dad…all of the people who love you.
Keep Reading and Learn How to Save Money for Life