While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones. Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones of the expense, delay and frustration associated with managing your affairs when you pass away or become disabled.
The recent passing of Aretha Franklin brings to light the importance of estate planning and leaving a Last Will and Testament or Trust to provide direction for distribution of your assets upon your passing. According to court documents, legendary singer Aretha Franklin did not have a will when she died, opening up her estate to public scrutiny and potential problems. Failing to create an estate plan can cause lots of headaches for heirs, in addition to unnecessary costs.
Franklin, left behind four sons, but no guidance on how to distribute her reported $80 million estate. According to The New York Times, her sons filed paperwork in Oakland County, Michigan, indicating that she died intestate — that is, without a will. The sons nominated Franklin’s niece to serve as the personal representative of the estate. When someone dies without a will, the estate is divided according to state law.
By not having a will or trust, estates may be required to go through a long public probate process, which will likely cost an estate considerable money. If Franklin, who was quite private in life, had created an estate plan that included a will and a trust, she could have avoided probate and kept the details of her financial circumstances private. In addition, by not having a will, Franklin has opened her estate up to potential challenges that could drag out the probate process.
Unlike with the estate of Ms. Franklin, Indiana does not have inheritance taxes, but if you reside in a state, like Michigan that still has estate taxes, the estate could be subject to unnecessary estate taxation without proper planning. Although Aretha Franklin may not have been able to avoid estate tax entirely, there are steps she could have taken to reduce the amount her estate will have to pay.
Estate planning is important even if you don’t have Aretha Franklin’s assets. It allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes, court costs, and attorneys’ fees; and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.
Ultimately, a well thought out estate plan should provide for your loved ones in an effective and efficient manner by avoiding guardianship during your lifetime, probate at death, and unnecessary delays. You can contact one of our qualified estate planning attorneys to review your family and financial situation, discuss your goals and explain the various options available to you. Once your estate plan is in place, you will have peace of mind knowing that you have provided for yourself and your family. Contact our office today at (317) 817-0300 to begin working on your estate plan now.