Yet another reminder in the news – no adult should die without a willMay 19, 2016
Be prepared! The recent passing of Prince will make headlines the rest of the year as we all learn what a financial fiasco it can be to die without, it appears, leaving a written will.
You don't have to be fabulously wealthy to experience this kind of mess at the death of a family member, because not having a will -- or even a rudimentary estate plan -- can touch off unwanted drama for your family descendants. One of those descendants could be you.
Some studies estimate that 55% of adults in the United States do not have a simple will in place, much less more complex estate planning documents like a living trust or irrevocable trust. People push the priority down low and are reluctant to confront their mortality.
If you don't have a will, the government will be happy to fill the void for you. Without leaving direction of any kind in place, a family member could be exposing loved ones to unnecessary expense and delay in settling an estate through probate. It can set up the possibility of contentious disputes that will eventually be settled by probate judges. The courts will simply follow the generic rules of asset distribution established by each state, called intestacy laws.
Moreover, state probate laws vary widely. In the case of Prince, a Minnesota judge will apply Minnesota laws to the estate. Prince was reportedly unmarried at his time of death, which makes siblings next in line, unless DNA testing confirms the existence of any children.
The absence of a will also subjects one's life to public scrutiny. You may think your financial affairs are private, but in reality, your family could now be, as in the case of Prince, fair game for media coverage.
So knowing your own state's peculiarities is important. Those issues can be addressed by working with a local estate planning attorney to create your last will and testament, or you can take it a step further by creating a living trust, which governs your wishes while you are alive as well as after your death. Here are a number of good reasons why you should create a will or make advance plans for contingencies now:
- No one can write a better outcome in a will for loved ones better than you can.
- Having a will makes estate settlement more efficient in terms of time and costs, so don't procrastinate.
- Are you married with children? If so, you should identify now those you trust to be the personal representatives and guardians for your minor children.
- Getting remarried or divorced? Reconsider the beneficiaries named in your will, life insurance and 401(k).
- Have a favorite charity? Make your contribution count in a written document.
- Had a recent health scare? Get a will and a health care directive set up.
- Wondering where to go for advice? It is best to have a local attorney create your document as rules for a valid will vary state to state.
- Wills evolve with you -- you can change your will as many times as needed.
If you know the way you want your estate settled, why not do it today? Make a difficult time less difficult. It's a shame Prince didn't listen to his own lyrics when he wrote, "But life is just a party, and parties weren't meant to last." Like Prince, you could have very disinterested parties unraveling your legacy.
- Past performance is no guarantee of future results, and the opinions and other information in the commentary are as of May 19, 2016. This summary is intended to provide general information only and is reflective of the opinions of Commerce Trust Company's Financial Advisory Services Group.
- This material is not a recommendation of any particular security, is not based on any particular financial situation or needs, and is not intended to replace the advice of a qualified attorney, tax advisor or investment professional. Diversification does not guarantee a profit or protect against all risk.
- Commerce does not provide tax advice or legal advice to customers. Consult a tax specialist regarding tax implications related to any product and specific financial situations.
- Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
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