Musical legend Prince died without a will. People magazine reported that his fortune (estimated at $250 to $300 million) will be disposed of by Bremer Trust. Prince banked at Bremer Bank, who was appointed to handle his estate and locate heirs, a judge in his home state of Minnesota ruled. Relatives include a sister, Tyka, and five half-siblings.
I was surprised to learn that Prince never instructed his legal team to develop a will or trust. He had access to the highest-level advisors and legal teams, who most certainly would have urged him over the years to do so. At one point he married and fathered a child, and in recent years suffered from poor health. These are times when most people make out a will, or to update existing documents.
Prince was not only a brilliant musician, he was very much in control of his affairs. This is the man who, in 1993, legally changed his name to a symbol as a protest against the terms of his contract with his record label at the time. It’s hard to believe he didn’t have strong feelings about the disposition of his fortune, estate, healthcare derivative and most especially his studio and musical library. Prince hinted that his vault contains a huge catalog of never before heard music.
Prince was not only a brilliant musician, he was very much in control of his affairs.
It’s important to have a will. That goes for rich people, and average citizens who own a small house, old car and work a regular job. Anyone with a net worth of a hundred thousand dollars or more should have a will – or better yet, a trust.
For many years I harped on family, friends and clients to at least make out a simple will. In recent years I changed my mind. I now advocate a revocable living trust (RLT). Trusts are not just for millionaires. They’re a great financial tool for most middle-class citizens.
But let’s back up a moment and review. It is important to understand the three main documents that you should definitely consider: a will, a revocable living trust (RLT) and a durable power of attorney for health care and finances.
Having a will is better than having nothing at all. A will is a piece of paper that legally declares where your assets go upon your death. The downside is that a will benefits the sitting judge at the courthouse, not any of your relatives or heirs. Did you know that 15-20% of your money goes to the county in probate fees when you die? Anyone with more than a hundred thousand dollars in assets should establish a trust. I don’t mean do-it-yourself with a form online but hiring a first-rate attorney who specializes in wills and trusts. Need a recommendation? Check out this page of my website. I do not take referral fees or kickbacks but I do refer to the top one percent of attorneys throughout the United States. You can be assured that each referral is to an attorney that I have personally done business with over the years.
Revocable living trusts
A revocable living trust, so-called because you make and change them along with your circumstances during your lifetime, also determines who inherits your assets when you die. I estimate that establishing a trust will cost you between twenty-five hundred to four thousand dollars. In the long run, that will save your estate and beneficiaries the previously referenced fifteen to twenty percent in fees. If you have a million dollars in assets and die without a will, a lawyer will be appointed in your county to probate your will. He will get paid, and the county will get approximately $150,000 to $200,000 of your hard-earned money.
Think about doing some research and planning while you are still alive. A trust is one of the best financial moves you can make.
Durable power of attorney for health care
Finally, when you establish a medical power of attorney, aka “durable power of attorney for health care,” you have officially designated a trusted family member or friend to make health care decisions if and when you are unable to do so. I cannot recommend strongly enough that everyone take the time to assign someone to do this for you.
If for whatever reason a trust is not for you, at least make out and execute a will and the durable power of attorney. I have seen so many surviving family members torn apart over end-of-life health care decisions and inheritance issues. Make sure you have the peace of mind that you have clearly and legally laid out exactly how you want your earthly goods disposed of and how your health care will be administered.
For our California residents and readers, we strongly recommend the Hess-Verdon & Associates firm located in Newport Beach, California. Their phone number is 949.706.7300. The principal there is Jillyn Hess-Verdon. You may speak with her or any of her competent staff. For those not in California, please call our toll-free number below for a referral.
Simply stated, be prepared.