In some of our previous blog posts, we’ve discussed the importance of having an estate plan, but some people still wonder if they need to worry about having something in place.
The best example we can provide as to why this is so important is to talk about what happened when Aretha Franklin failed to make any plans for what she’d like to happen to her $80 million estates upon her death.
Mind you, she didn’t just have an estate plan, she also didn’t have a will.
It’s also worth noting that Prince didn’t have an estate plan either, which meant settling his estate has turned out to be a lot more complex than it should have been. First, the person who was tapped to be the executor of his will hasn’t been able to divide the estate between his six surviving siblings because the executor (and the IRS) still need to reach an agreement as to the value of the estate at the time the singer died.
To date, none of Prince’s heirs have inherited any portion of his estate (which, you should know, is estimated to be valued at around $200 million.)
The same type of thing is happening for Aretha Franklin’s four sons.
When someone dies without an estate plan or will, it can lengthen the asset distribution process extensively
Yes, the delay in the distribution of asset can seem unfair (especially in Franklin’s case, since one of her sons has special needs), but when someone dies without an estate plan (or a valid Will), the estate will wind up in probate.
When this happens, the probate court takes over. The court appoints an executor and then the executor and the court work together to handle any and all claims that have been made against the estate. They’ll also need to put together a plan to pay off creditors and any outstanding loan balances, etc.
When you die without an estate plan, what should have been a simple distribution of assets to your chosen heirs can turn into an expensive, lengthy process that in some cases, can take years to resolve.
By establishing an estate plan you’ll be able to ensure the process of asset distribution goes quickly, and perhaps most importantly, it will help ensure it’s done according to your wishes.
If you die when your adult child is 19-years old and you have significant assets, an estate plan can help ensure your child won’t receive your entire estate all at once. Instead, you could choose to provide them with $X dollars a year to pay for college and living expenses, with the balance being allocated after he or she reaches a certain age.
Have questions? Call the Law Network PC today