The media recently reported two shocking items: the death of Prince and the possibility that he passed away without a Will. Given Prince’s well-known efforts to control his music and career, this would be surprising.
If true, it would not be the first time we have seen a celebrity pass without leaving specific estate directions. The immense wealth of his estate, his vast real estate holdings, the ongoing value of his recordings and publishing rights, and the complex nature of his family (he had a sister and five half-siblings) compound the problems resulting from such a “misstep,” increasing the potential for a protracted and expensive legal battle. Despite the magnitude of the issues in Prince’s case, the problems are essentially the same when anyone dies without an estate plan. Prince’s situation offers a valuable lesson for all of us.
What is that lesson? You MUST have an estate plan when you have two things – assets and heirs. So what, at a minimum, should this plan entail?
First, make sure you have a Will that accurately reflects your current situation. Pay particular attention to the beneficiaries named in the Will. Be sure to change or update beneficiaries after any major life event – such as a marriage, divorce, birth of a child, etc. This is all the more urgent when there are further complications – such as blended families, children with special needs, etc. – that require additional consideration. If the asset we bequeath is the result of our life’s work, like a business or Prince’s music, the import and the responsibility can be enormous. It can also present problems if this represents a disproportionate amount of our wealth, making it difficult to be equitable if given to one person. Careful planning is essential to preserve the value of our work and to make sure those we love are properly benefited.
You will also need to review investment accounts – such as an IRA, Roth IRA, retirement plan account, or Transfer on Death (TOD) account – that designates their own beneficiaries. These directions “override” your Will, so make sure that they are correct.
Review and update your Advanced Directives (your financial and health care powers of attorney); make sure they have the current authorizations needed (such as HIPAA authorization to share medical information) and name the individuals you feel could best serve your interests in the event of your incapacity.
With these provisions in place, the estate planning process will be much smoother and loved ones will be protected from losing significant assets or enduring unnecessary distress during a time when they are already grieving.
Remember: you are passing on two important gifts to your heirs – money and meaning. Money means so much because it allows us to address needs or pursue personal goals. How much, what and to whom we give can also convey deeply personal meanings about the value of our relationship, whether we intend to do so or not. A prized possession that is given to someone unexpected could create irreparable rifts between family members. We are rarely at our best during periods of grief, so it is not surprising that there is increased potential for wounded feelings or enduring resentment. Consider writing a letter of direction that outlines who is being given what, and even why. This could diffuse a variety of potential problems.
When you have assets and heirs, it is essential to craft an estate plan that properly conveys the “money and meaning” you have spent a lifetime building to the people you love. If it is done well, it can be a blessing that eases the grief of their loss. If it is not – as the media is currently reporting in Prince’s situation – the result could be a prolonged legal battle over assets and legacy. Only time will tell in this unfortunate case, but at this point it appears that Prince’s heirs can expect a long road ahead of them before anything is settled.
For informational purposes only. Fort Pitt does not provide legal advice but may be able to partner with other trusted professionals to deliver these services to you.