Like many Americans, Aretha Franklin failed to draft a will. More than 58% of us are in the same boat: no will or estate planning documents, leaving our families and heirs in peril. The Chicago Tribune’s recent article, “Don't leave a mess for your heirs” reports that, what’s even more troubling, is the fact that for those with children under the age of 18, just 36% have an end-of-life plan in place.
Many of those who haven’t done any estate planning, say they just haven't gotten around to it. That’s understandable, but it’s important that you conquer your anxieties associated with this emotional subject and take control.
For Aretha Franklin's estate, Michigan (her state of residence) will decide who will get what. The local probate court will oversee everything from property, retirement accounts and the residuals that flow from her music catalog. It’s possible that her assets will be split among her four children. However, as many parents know, some kids are more prepared to manage financial distributions than others—a big reason why estate planning is so important.
If you have property you want to go to specific individuals, you should create a document with instructions as to who gets what.
Some people think that because they don't have a high net worth, they don’t need to worry about such things. However, estate planning isn’t just about money—anyone with young children should have a will, because a will names the guardians of minor children. You want to be certain that you, and not the courts, designate your children’s guardians.
When you’re ready to start or revisit the planning process, talk to a qualified estate attorney (yes, pay for a lawyer and don’t do it yourself), here are the basic documents to consider:
- Will: A document that makes certain your assets are passed to designated beneficiaries in accordance with your instructions. The will designates an executor, who will oversee the distribution of your assets. If you have minor children, you must name a guardian for them.
- Letter of Instruction: This may include the appointment of someone who will ensure the proper disposition of your remains. That can be important, if you’re choosing a method that’s contrary to your family's traditions.
- Power of Attorney: This gives a person you select the authority to act as your agent, in certain circumstances.
- Health Care Proxy: This gives a person you select, the power to make health care decisions on your behalf, if you lose the ability to do so.
- Trusts: Revocable (changeable) or irrevocable (not-changeable) trusts may be useful, depending on family and tax situations. You need an experienced trust attorney to help you decide, if this is a sound strategy and to properly prepare the documents.
Reference: Chicago Tribune (August 30, 2018) “Don't leave a mess for your heirs”