Monday Author: Susanne Skinner
Two important things happened in August that impacted my life. I had a significant birthday that arrived with some thought-provoking epiphanies and singer Aretha Franklin died.
These events are linked in several ways. When you become eligible for Medicare you realize you have lived a significant portion of your life; that future you saved for has arrived. Suddenly, you are faced with how you want to spend your remaining time and money.
Knowing you don’t get to choose your exit date makes this relevant to what you must do to enjoy the years you have left. What’s Aretha got to do with that? I grew up listening to the Queen of Soul and her death is one of those epiphanies. Aretha died without a will.
She knew she was dying—she had pancreatic cancer. A woman with her financial wealth surely had advisors, accountants and attorneys to prepare her estate for her eventual and predictable death. That they did not provides an opportunity for us to learn a lesson from the Queen of Soul.
Dying Without a Will
Aretha left an estate conservatively estimated at $80 million. She left no instructions as to its disposition, meaning she died intestate. If you die intestate, the laws of the state you live in determine how your assets are distributed upon your death. This includes bank accounts, investments and real estate. When you don’t have a will, the state makes one for you.
Aretha’s assets are destined for the probate court and lengthy processes that will rack up legal costs and reduce the value of those assets. And that’s if the process goes smoothly.
Where there’s a will there’s a family and Aretha had four children. Once an estate goes to probate there is little chance it will go smoothly, even if everyone agrees. Since Aretha left no indication of her wishes, it’s impossible for anyone to verify them or carry them out. Those decisions will now be made by the State of Michigan.
The task of creating a will or trust means facing your own mortality, and let’s be honest, who thinks that’s fun? But no one gets out alive, and some people can’t deal with that reality. Ignoring the obvious eliminates the ability for you to make decisions about the disposition of your assets and creates a huge burden for the family you leave behind.
Aretha is not alone; Farrah Fawcett and Bob Marley (both terminally ill), Prince, Howard Hughes and Martin Luther King Jr. also neglected to leave a will. In fact, according to the AARP 67% of American’s do not have any end-of-life plans in place. The most common reason offered: “I just haven’t gotten around to it.” Famous or not, everyone needs a will or trust.
The Importance of Estate Planning
The most important advantage of an estate plan is that you have complete control over the disposition of everything you own. You get to choose the people you want to inherit your estate and name the things you want them to receive.
By placing those assets in a revocable trust, which is not subject to the court’s oversight, you protect your privacy (a will is a public document) and by naming yourself as trustee you maintain control during your lifetime. When you die, a successor trustee (whom you have selected) executes the instructions you have legally left in place.
Aretha’s passing was an important reminder to update our estate plans. Our children are no longer minors, we have no need of guardianship, and we recently moved in anticipation of our own retirement. These are important factors in determining how you manage, adjust and distribute your assets.
We are blessed with good health, but we’ve also had some health scares. Aging ups the ante for health-related issues and comes with a grim reminder that some roads are one way. The best and most efficient way to protect yourself and your family is to designate a legal power of attorney (takes care of you after you die), a health care power of attorney (takes care of you before you die), and a legally binding end-of-life plan. Because the unthinkable and the unexpected happen every day.
Loose Ends and Peace of Mind
Doing these things ties up a very big loose end and brings everyone peace of mind. I can speak with first-hand knowledge about the feelings of anger, resentment and helplessness that arise when a family member waits too long and someone else must step in.
Diminished mental capacity, no power of attorney and lost paperwork are major obstacles when it comes to putting affairs in order for the living. Agencies like Social Security and the Veteran’s Administration take months of paperwork and vetting to obtain representative payee status.
The burden of sorting out someone else’s affairs is emotionally draining, time consuming and costly. It is also100% avoidable.
This blog scratches the estate planning surface, hopefully enough to prompt those of you that have been putting it off to get it done. Delaying the conversation, refusing to write a will or create an estate plan invokes the risk of later becoming never.
Regardless of the amount of money and property you are passing on; let it be given based on your wishes, not the laws of your state. Aretha lives on through the legacy of her music; and hopefully she’s driving that Pink Cadillac down the Freeway of Love, but the distribution of her estate will be decided by the courts.
And just in case you thought you were going to live forever…well, you’re not.