As a financial planner, it’s astonishing to see wealthy individuals, like music legends Michael Jackson, Jimi Hendrix, Bob Marley, and Amy Winehouse, who pass away without a will or estate plan. These individuals have so much to protect, including real estate, intellectual property, and tangible assets worth millions of dollars, yet they don’t take the necessary steps to protect their assets. However, it is not just with musicians where we see this happen; it’s everywhere. Even our nation’s 16th President, Abraham Lincoln, is the first president to be assassinated and the first president to die without a will- despite being a lawyer himself.
Studies have shown that over half of Americans don’t have a will, and there could be many reasons for this. It could be due to the emotional turmoil that comes with facing our own mortality, a lack of trust in family members and advisors, or the belief that we have plenty of time to prepare. But not having an estate plan is a huge mistake as it could result in your assets going to individuals or organizations you never intended to receive them.
It’s important to note that not all assets will necessarily go through a will. For example, assets held in retirement accounts or life insurance policies will pass to beneficiaries designated on those accounts. Joint accounts will be passed to the surviving owner. Some financial accounts may have a “transfer or payable on death” designation, meaning the account will pass to the beneficiary designated on the account.
Every state has its laws governing asset distribution in the absence of a will. In Pennsylvania, for example, if you have a spouse but no children or surviving parents, your spouse will receive your entire estate. But if you have children or surviving parents, they will each get a share that reduces the spouse’s portion of the estate.
In addition to assets, it’s important to consider who will take care of your minor children and manage their property if your spouse has passed away before you. If you’re a business owner, your minor children could end up owning a portion of the business, leaving their court-appointed guardian acting as a partner on their behalf. It’s essential to have a will in place to avoid such scenarios, and if you’re in business with non-family members, you may require all partners to have a will.
Keeping your will in a safe and accessible location is vital, and your executor or attorney may be a good choice for keeping the original copy. In addition, it’s crucial to review your beneficiary designations on retirement accounts and insurance policies, as well as joint accounts, to ensure they align with your wishes. You should also review your will every few years or after significant life changes, such as divorce, remarriage, birth of children or grandchildren, or retirement.
Not having a will or improper estate planning can result in numerous situations, including heirs receiving assets that you didn’t intend them to receive, disputes over your assets, and your minor children’s guardianship and inheritance. To prevent these scenarios, preparing a will and reviewing it at least annually is essential. Don’t wait to plan for your future, take lessons from these tragic celebrity deaths, and protect your assets and loved ones.