Aretha Franklin left no will for her $80 million estate — but even people without tons of money must get their affairs in order ASAP. Here’s how.
It’s never too early to write your will — but it can become too late in an instant.
Aretha Franklin died of pancreatic cancer two weeks ago without leaving a will or trust, and now her four sons are left filing claims to take possession of her reported $80 million estate. While most people don’t have to worry about dividing up millions in assets, the uncertainty over what will happen to the Queen of Soul’s equity should be a wake-up call for everyone to draw up a legal document that outlines what to do with what they do have — and, more importantly, who has the power of attorney to make financial and medical decisions on your behalf if they become incapacitated in an accident or medical emergency.
A will (or last will and testament) is a legal document that lists your heirs, designates a guardian for your children and names an executor, the person who collects and distributes your assets. The will tells a court how you want to distribute your assets in a probate proceeding, which gives a public notice of your death and allows creditors to file claims against the estate. Whatever is left over after those debts are paid goes to the beneficiaries of your will.
Yet less than half of U.S. adults (42%) currently have estate planning documents in place, according to a 2017 Caring.com survey, and that figure is even lower (just 36%) for those with kids under 18 — even though this documentation would dictate who becomes a child’s guardian if the parents are deceased. And a Gallup poll conducted after the sudden 2016 death of music icon Prince, who also didn’t have a will, found that only 44% of Americans had a will, down from 51% in 2005.
“It makes people uncomfortable to think about dying, but I’m sorry — everyone is going to die at some point,” Laura Dixon, the editorial manager of Caring.com, told Moneyish. “If you are an adult, if you have any loved ones and you own stuff, then you need a will.”
The Caring.com survey asked 1,003 adults whether they currently had estate-planning documents in case of their death, as well as the reason why not, if applicable. Most of those who didn’t (47%) said they “haven’t gotten around to it” yet, while 29% of those without a will said it was because they “don’t have enough assets to leave anyone.”
“There is this misconception that wills are only for rich, old people, but that is not the case,” said Dixon. “Your will goes over so much more than money.” A will can detail your funeral wishes. It will name who inherits your assets, or indicate that you’ve donated assets to charity. And estate planning is a key issue for women: If you’re a caregiver for children, a spouse or a relative — most caregivers (66%) are female — it will spell out who takes over as the legal guardian or caregiver in your absence. Plus, women around the world often outlive men, so women will likely be the last ones standing to manage their wealth.
“If you do not have a will in place, you are basically giving over your assets and these decisions to the state where you live, and the state will decide who your heirs are, or who the executor of your estate will be,” said Dixon. And that decision may not align with your wishes.
Caring.com also found that 78% of millennials (ages 18 to 36) said they did not have a will because they didn’t expect to die young — and if they did, they took it for granted that their parents could still take care of everything. The problem is, once you turn 18, your parents lose the legal right to make many decisions for you, unless you designate them as your power of attorney or health-care proxy in a living will or advance directive, which outlines what medical treatment you would or would not want during a medical emergency when you would be unable to communicate your desires, as well as who can make medical decisions on your behalf.
“Things like wills and power of attorney and health-care power of attorney identify the people in your life who share your values and know what you want, which is an important way to make sure that you are protected and that your wishes are followed,” added Amy Schirmer, a financial advisor at SunTrust Bank. “And as you get older and move away from your family, sometimes values start to diverge. There can be issues around things like organ donation, for example, where your parents may have a different view than what you would want.”
Plus, getting your affairs in order will make an already stressful and devastating situation marginally easier for your family. “Think of a will as a gift to your family,” said Dixon. “It’s hard enough when a loved one dies, but you don’t want to make them deal with lawyers and all kinds of costs and delays on top of that, not to mention fighting over who inherits what.”
While software such as Quicken WillMaker or sites like LegalZoom offer DIY will-creating services starting at $69, legal experts told Moneyish that you really should visit an estate lawyer, as online forms can contain errors that make them inadmissible in court. “State laws vary as to what is considered a valid will, so it’s worthwhile to find an attorney who specializes in estate planning … to make sure it is legal and valid and will be upheld in court,” said Schirmer.
A simple will for a single person runs $500 or $600, one estate lawyer told Moneyish. Caring.com also notes that a lawyer can draft a simple will and power of attorney for less than $1,000. Paying these fees up front can save your relatives time and money down the line. Plus, an attorney can catch oversights, like beneficiary designations. If you want your kids to inherit your 401(k), IRA and insurance policies, but you designated your ex-husband as your beneficiary when you first opened those accounts, the beneficiary designation trumps your will — so your ex would still get that money, unless you updated those policies to go toward your kids.
Before you visit an estate-planning attorney, make a list of all of your assets (including property, investments, vehicles and valuables), accounts (such as cash, savings, credit lines and insurance policies), and think about who you trust to designate as the executor of your estate and the guardian of your kids, so you can arrive prepared.
Another thing people often overlook is who can take over their digital assets, such as social media and email accounts. “The default for companies like Facebook and Twitter and Yahoo is to deny access to anyone but the original user,” noted Schirmer. “There are now terms that are written into wills saying, ‘I want my executor … to be able to access these accounts,’ because not having that makes it much more difficult for a family member to access this info.” Maybe you want family members to be able to access your photos or manage your Facebook page — or perhaps you’d prefer that all stays private. Either scenario should be noted in your will.
Once your will is written and signed — typically before two witnesses — you will want to keep it in a secure but accessible place, such as a fireproof safe in your home. (Avoid a safe deposit box in a bank, as your family will need to get a court order to open it.) And let your lawyer, your executor and a couple of trusted relatives know where the will is, so there is less confusion if they need to access it. Your lawyer will also probably keep a copy in his or her files for their records, but the only viable version that is accepted in court is the ink-signed original will.
And this isn’t a one-and-done document; you will probably need to update it during any major life events, such as getting married or divorced; each time you have a child; if someone you’ve named in your will dies or becomes incapacitated; or if you gain wealth or major assets, such as buying a home or a car. Even if none of these life events happen, it’s still good to take your will out and read it every five or seven years, just to make sure that your wishes remain the same.
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