What do Prince, Jimi Hendrix, Sonny Bono and Aretha Franklin Have in Common?
As financial planners, our jaws drop in shock when we hear wealthy celebrities such as Sonny Bono or Prince pass away without a will, trust or estate plan. These celebrities have the financial resources to create a comprehensive plan ensuring their wishes are met. What is the disconnect and/or what can we learn from these unfortunate circumstances? Here at ACM, we’ve discussed and published articles which address formalizing an estate plan and essential documents one should consider. Estate planning certainly isn’t a one size fits all since it is tailored to each family and their dynamic.
The process of probate is a potentially long and an uneasy process as you’re working conjointly with the court system(s). It is time consuming, can drag on for years, and it may be extremely costly paying attorneys and other professionals. Those funds being spent on unnecessary expenses should be dedicated to your wishes.
Probate is part of public record so for folks who want to keep their privacy and “business” within the immediate or extended family, avoid probate. When you hear nothing about the administration of an estate, it reflects the deceased having had a comprehensive and up-to-date estate plan.
Dying without an estate plan means the probate court will divide up your estate pursuant to state law. This may result in your assets being inherited by estranged family members or, even worse, family members who you strongly dislike .Yikes! Most likely, your family is mourning the situation and may be forced to make decisions while in an unstable or emotional state of mind.
After a life changing event such as a divorce or birth of a new child, you should always revisit your estate plan. It is not uncommon for a child to be left out of a will, trust or an ex-spouse to be the named beneficiary of a retirement account. Updating beneficiaries should be at the top of the to-do list amongst other estate planning tools, such as a QTIP trust, to avoid any potential family issues or pitfalls if/when they arrive. Martial trusts, Bypass trusts, generation-skipping trusts, and spendthrift trusts are just a few additional examples of how you can upgrade your estate planning (if needed).
There are certain things one can control in life and other things we have no control over. What you can control are the things you should focus on. We can plan for your career, control taxable income, goals, spending habits, and how you want to leave your legacy. Unfortunately, we have no control over the market, geopolitical events or what the marginal income tax brackets will be next year or in 20 years.
Find the time to create an estate plan. The process can start today with a simple phone call. Please do not hesitate to reach out to your ACM Wealth Advisor if you have any questions.
Photo Source: Carl Richard the “Behavior Gap”
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