By now most people are aware of the recent passing of music legend Aretha Franklin. The loss of such an icon is always a sad thing. Not only was she a talented singer and performer, but she was also an inspiration off stage in areas such as the struggle for civil rights for all Americans.
Earlier in the week we learned of another fact, something less glamorous and exciting — that Mrs. Franklin never completed her estate plan.
An estate plan, by definition, is the legal process of deciding what happens to one’s property and assets after death.
This is important because if we do not make the choices of where things go after we die, then the state where our assets were titled will make that decision for us.
The role of transferring title after death falls to the probate court of each state, and each state has varying nuances in their probate laws.
We assume that celebrities and the wealthy have all of this stuff taken care of. We assume that people like Michael Jackson, Prince, Elvis Presley, Marilyn Monroe, and yes, Mrs. Franklin, would be surrounded by the best lawyers and accountants — the top advisors who would help them navigate these issues.
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The one thing that all of these named celebrities have in common is that they died without an
estate plan. Many people ask why.
Why wouldn’t they hire the right lawyers to draw up wills and trusts?
Why would they not deal with this so their families don’t fight over the money?
Why would they not have a plan that ensures that the income from royalties of their music and films goes to their heirs and loved ones, not back to the studios and record labels?
We will never know the answers since they are no longer here to tell us, but after being in the financial and estate planning industry for 17 years, I can assume one reason: They did not want to face the reality that they were going to die one day.
Mrs. Franklin had pancreatic cancer and she was of sound mind and spirit for years prior to her death.
In an article published by CNN soon after her death, one of her long-term attorneys said he had been pleading with her for the past few years to set up a trust. My guess is that she just didn’t want to face the fact that she was going to die. Many people have a hard time talking about death and how to deal with things when that time comes. However, the fighting that will ensue from the lack of having a plan may be worse than what Mrs. Franklin would have ever wished for her loved ones.
Not only will the fate of her assets be decided by the probate court, it will also all be made public. One benefit of having a trust is that it retains privacy and ones assets do not go through the probate court system.
The important thing for you as the reader to take away from this is that when it comes to your estate, the old saying rings true:
“If you fail to plan, you should plan to fail.”
Most people believe that one must reach a certain level of wealth before it is appropriate to do estate planning work. On the contrary, everyone should take this kind of planning seriously.
Most people will have retirement plans and life insurance at work, and if we add a home and sprinkle a few other assets in, it’s easy to see how things could get messy without a plan on how it should all be dealt with at death.
As part of the estate planning process, an attorney will draft what is called a living will. The living will contains things like a power of attorney (POA) and healthcare directives.
These are very important, as they allow you to name someone to act on your behalf in the event that you’ve become incapacitated. For example, if you’re in a car accident and didn’t die but are in a coma, who would make sure the bills are paid?
Tunde Ogunlana is a certified fund specialist and family wealth advisor at Axial Family Advisors.