The world was rocked last week with news of the death of American music icon Aretha Franklin. Known as the Queen of Soul, Aretha leaves behind a strong legacy with songs that will go on forever. But what of the legacy that she left for her family?
Aretha Franklin joins a long list of icons, including Prince, Jimi Hendrix, Bob Marley and Sonny Bono, who will be remembered not only for their music, but also for departing this world without a will, leaving their heirs’ fates in the hands of the courts and attorneys. In Aretha’s case, not only does she leave behind a huge estate, she has a special needs son whose care must be taken into consideration. Nearly everyone is dumbfounded by this lack of planning, but will it serve as a cautionary tale to Americans?
Approximately 55% of American adults do not have a will in place. On some level, it is completely understandable. Finances and death are ranked as the two topics that people feel are most challenging. These are tough conversations that force you to contemplate your mortality and your legacy. But if there was ever a time to stretch out of your comfort zone, this is it. Wills are not just for the rich and famous.
Why Everyone Needs a Will
- Control the Flow of Assets – Some of your assets will flow automatically to your intended beneficiary because of the “title” of your accounts, regardless of your will. However, not all assets work that way. If you die without a will, the state, not you, will determine who gets your assets.
- Manage Guardianship – When you have minor children or a special needs child, you will appoint a guardian through the will, so you are in control of who is responsible for your children when you pass. Otherwise, this decision goes to a court. Many times, people become paralyzed by this decision and put off creating a will because they can’t decide.
- Save Time and Money – Depending on the state that you live in, probate costs can be extremely high. Having a will helps minimize these costs and expedite the process.
- Protect your Privacy – When a will goes to probate, it becomes a matter of public record. Anyone will be able to access your debts, assets and other information that you would likely prefer to be kept within your family.
- Maintain Control of your Healthcare and Finances – By establishing a living will and power of attorney, (both medical and financial) you set the tone for how your medical needs are met and who provides you with assistance in making decisions on your behalf, according to your wishes.
These become even more important when you consider divorce and blended families. These situations create additional complexity such as taking care of children from previous marriages.
Most people can probably share a story about what happened to a family in the absence of a will. As Certified Financial Planners, we have seen it all. There are instances when fighting over an estate tears a family apart. There have been times when the family does its best to carry out what they think the deceased would have wanted. There are times where assets flow to ex-spouses because beneficiaries were never updated. Occasionally, assets flow to a current wife, without regard for children from a previous marriage. In some cases, these issues can be worked through but in others, they cannot.
One of most consistent recommendations in any of our financial plans is to create or update your estate planning documents. Not only does this ensure that your legacy unfolds the way that you wish it to, it relieves your family from the pressures and complications that arise from having to do it without a will, giving them peace of mind and allowing them to focus on the already difficult task of living life without you.