25 Apr 2016

Prince – Reason to do Estate Planning

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Prince has died!   The reclusive star’s death shocked and surprised the musical world.

But Prince’s death has (hopefully) caused people to think about the one important thing they don’t want to think about: estate planning and the possibility of becoming disabled, or worse, dying.

So what have you done for your own estate planning?   It was reported recently that 70% of Americans have neglected to write their own will.  (http://www.marketwatch.com/story/why-wills-arent-just-for-the-wealthy-2015-03-17)

Much less have Americans done more sophisticated planning, such as doing a living trust, or providing asset protection for their loved ones.

To die without a will is referred to as dying intestate.  If you die without a will or trust, the state you live in (and states where you have property) have already written your will for you, and the result may not be what you want at all.  The consequence of a state written will can be totally contrary to your own wishes, especially if you have children from a prior marriage.

Dying with no will or trust fails (and often completely) to protect your loved ones, often your children, from accidental disinheritances due to divorce, lawsuit, or simple accidental disinheritance by having your estate go to someone else’s kids.   This happens all the time, in fact.   Persons with children from a prior marriage will remarry without executing a pre nuptial agreement or doing a will or trust specifically naming their own children as primary or ultimate beneficiaries.  For example, Dad has two kids and gets remarried to Jill, and either names Jill in his will or doesn’t do a will at all.  Dad dies, and his entire estate may to Jill, by his will or by state law.  When Jill later dies, Dad’s estate which is now owed by Jill and her estate, all goes to Jill’s own children.  Thus Dad has effectively disinherited his own children!

Again, this happens all the time!

And if, like Prince, you have a larger estate (in excess of $5,000,000 for a single person and $10,000,000 for a married couple), having no will or trust in place could also cost your estate hundreds of thousands or millions of dollars in unnecessary estate tax!

My commentary and solutions discussed in this article constitute legal information, not legal advice.   Possible solutions discussed may or may not apply to your situation and vary from state to state, and  may not be available in the state where you reside.   If you are a Colorado resident, please feel free to call me for a free consultation at 303-457-9500.  Alternatively, be sure to discuss these issues with a competent estate planning attorney before taking any action.


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