“But while we know about the Queen of Soul’s insistence on being paid in cash for her shows and Prince’s vast Paisley Park estate and other homes that were valued in the tens of millions, it appears that neither had the right people looking after their money. Both died without wills to direct their fortunes.”
Here’s another example: the actor James Gandolfini had a will, but never established a trust. When he died unexpectedly five years ago, his personal finances were an open book, says the Robb Report in the article “Rest in Wealth: The Ins and Outs of Estate Planning.”
We know that he left $200,000 to his assistant, $500,000 to his nieces and some of his friends were left $50,000, while others were left $200,000. He gave his son his clothing and jewelry, and his wife received the rest of his personal items.
That’s the sort of thing you probably wouldn’t want people to know, especially if you are a famous actor. If you were the recipient of any of those large gifts, and your name was public knowledge, you better believe that your phone will be buzzing with calls from people you haven’t even thought of in years.
Only 60% of Americans have a will. If you’ve got a collection of cars, an amazing wine cellar or a handful of expensive watches and no will, then the state is going to decide who will get what. It won’t matter what you wanted.
If you have minor children and no will, the court selects a guardian. The guardian doesn’t work for free. That money comes from your children’s inheritance. If, like Aretha, you have a special needs child, your inheritance could cause the child to lose any state-funded support, like Medicaid.
Even if you’re not a multi-million-dollar artist, you need a will.
However, that’s just for starters. You also need a power of attorney and a health-care proxy. You may need a revocable trust. You may need a Special Needs Trust. There are many different tools available to protect you, protect your family, and transfer wealth efficiently (read: less taxes) across generations. It takes time to set up, and there are costs associated with having an estate plan created.
Once the plan is created, you have to tidy up the details too, like funding trusts, retitling assets, checking your named beneficiaries and other details.
Just consider the millions in taxes that Prince and Aretha’s heirs are going to pay.
Busy business owners need to decide whether they can make some free time to sit down with an estate planning attorney and create an estate plan. From a profit/loss perspective, it’s definitely worthwhile.
Reference: Robb Report (Nov. 10, 2018) “Rest in Wealth: The Ins and Outs of Estate Planning”