Michigan just lost another icon with the death of Aretha Franklin. Amidst all the tributes and stories about Aretha and her career, I read an article that stated she passed away without a will or a trust. According to her attorney, he advised her to do some estate planning, but for whatever reason, it never got done. Hopefully, her estate can be settled without problems for her family; however, who knows if that will happen. When people pass without a will or trust, it seems that in many situations, problems develop, particularly with someone such as Aretha with substantial means.
I cannot stress enough how important it is for every adult to have a will, and in many situations, a trust. We live in a complicated world and the less that judges, courts, lawyers and outsiders get involved with our private affairs, the better it will be for our loved ones. When you pass without doing any estate planning, the State of Michigan determines who gets your property and who is in charge of your estate. The result of this is that everything becomes more complex. When you couple that with the emotions that surround someone’s death, anything can happen.
When someone passes without any estate planning, it doesn’t mean that they don’t love their families-of course not. However, when someone does pass with an effective estate plan it does show that they wanted to make the handling of their final affairs as easy as possible on their loved ones. After all, the more you keep judges, courts and lawyers out of family affairs, the easier things will be for your beneficiaries.
We all have to accept the fact that we all are going to eventually pass. There is nothing that we can do to avoid it. In addition, it is important to realize that just because you do a will or trust doesn’t mean you think the end is coming anytime soon. Rather, it means that you have accepted the fact that life is unpredictable and you want to be prepared no matter what happens.
I believe there are some estate planning items that everyone needs to complete to be prepared. In addition to making sure you have a will and maybe a trust that are up to date and current, it is important that your beneficiaries are also current. Whether it is a brokerage account through Fidelity or Schwab, an IRA or an insurance policy, it is important that you have named a primary and a secondary beneficiary. Therefore, you should go through all your items where you can have a beneficiary, and make sure that you have beneficiaries in place and they are up to date and reflect your current views. At a minimum, every couple of years you should recheck your beneficiaries as well as when there is some change in your family. After all, whether it’s relatives or friends, family dynamics and friendships can change, and thus, it’s important that your beneficiary designations are current and accurate. I cannot tell you how many times I have seen people who pass with a divorced spouse or a parent who passed years ago still listed as the beneficiary.
Another item that would make managing your final affairs as easy as possible is for your relatives to know what assets, accounts and insurance policies you own and where they are located. In addition, having something in place so that your family knows how to access your online accounts, including passwords and login information, is also important. This will make handling your final affairs much easier on your loved ones. After all, if you have an insurance policy and your loved ones don’t know about it, how can they collect?
When I first got involved in this business, most people did estate planning to avoid federal estate taxes and the Michigan inheritance tax. The Michigan inheritance tax has been eliminated, and most people don’t have to worry about federal estate taxes. However, in today’s world where life is more complex than it’s ever been, estate planning is important for everyone to make sure that their loved ones can move on with their life and avoid family disputes. Therefore, if you haven’t completed an estate plan or if you haven’t looked at it in a while, this is a reminder that as adults we have adult responsibilities, and one of them is to plan for the ultimate, which we know will happen to each and every one of us.
If you would like Rick to respond to your questions, please email Rick at email@example.com.