While we do not usually cover celebrity issues on this blog, the news that Prince died without a will or estate plan in place was a shock. But it comes with a lesson. Now, right now is the time to move estate planning from the back burner onto a “to do” list.
An untimely death at 56 is never expected. Nor is a car accident that takes the life of a new parent. These are tragedies, but you can have a plan in place to protect loved ones and limit the confusion and costs tied to administering what you leave behind. In this post, we will discuss intestacy (legalese for dying without a will).
Probate court proceedings
When you die without a will or an estate plan, a judge must appoint someone to find you heirs, transfer property and pay remaining debts. The court will also oversee the probate process. Your estate will be divided according to Colorado intestate succession laws.
If you have minor children, a judge will appoint a guardian. This may not be the person you would have selected.
Costs and taxes
The costs of probate along with court-appointed executor fees are much higher than what it costs to create an estate plan in the first place.
Depending on the size of your estate, you could lose a good portion to estate and inheritance taxes. For Prince’s family the process will likely be drawn out and chaotic. A large tax bill will be assessed on a wide range of assets from music rights to intellectual property.
Loss of control
When you do not have an estate plan, you give up any ability to give a gift to a close friend or distant relative. When there is no surviving spouse, then property passes to children, grandchildren, parents or siblings. This could mean that someone you never got along with inherits the assets you worked so hard to acquire.
An experienced attorney can explain the steps needed to create an estate plan. Protect loved ones if anything were to happen to you by starting the process today.
Source: Forbes, “5 Things Prince’s Family, And You, Should Know About Estate Planning,” Winnie Sun, May 18, 2016