Why should we all have estate plans, no matter what our ages?
When Prince died prematurely last week, the world was in shock. How did an apparently healthy and wildly talented 57-year-old man leave us so suddenly? Not long afterwards, the second shock wave hit when people realized that Prince, who was currently unmarried and had no children, had not left a will.
The question echoed around the world: Who will inherit his estate?
His sister has filed documents to open probate and begin the lengthy process of distributing his assets, estimated at more than $300 million. It seems that someone as wealthy and renowned as Prince would have been advised to consult with an estate planning attorney. The error of omission, however, is not at all uncommon. A recent survey by Rocket Lawyer showed that a whopping 64 percent of Americans don't have wills.
Some people believe that it is only necessary to have a will if you have substantial assets. This is not the case, however. Dying intestate (without a will) creates difficulties for those you leave behind, no matter what the size of your estate.
Six Key Documents Everyone Should Gather
No matter what your age, as long as you have accumulated assets, now is a good time to gather the following documents in order save your family trouble and to make sure your wishes are carried out:
- Beneficiary forms to indicate who gets your 401(k)s, IRAs, life insurance and other accounts
- POD(payable on death) form, designating who will receive the money in your bank accounts
- TOD (transfer on death) form, designating who will take over the deed to your home
- Durable power of attorney form naming someone to make healthcare and/or financial decisions if you become incapacitated
- Living Will, or advance healthcare directive, covering what life support you desire
- Last Will and Testament, stating how you want your assets distributed and designating a guardian for any children under the age of 18
- Living Trust, naming a chosen representative, or successor trustee, who will transfer your funds to your designated beneficiaries at your death
It is important to remember that a trust, unlike a will, does not have to go through probate and can be used to help you manage your assets while you're still alive. It is essential that you keep your papers up-to-date, examining them regularly to make sure that changes in your life -- such as marriage or divorce, births, and deaths -- are taken into account. Consulting with an attentive and experienced estate planning attorney will facilitate the entire process, ensuring that all your papers are in order, that you have considered all the options, and that the arrangements you make are legally binding and financially sound.