The recent and unexpected death of the musical artist Prince at the early age of 57 reminds us of several important life lessons:
- Death can come at any time, when least expected and when we are least prepared for it.
- Dying without a will provides no protection for your family and your assets, and in many cases, only creates havoc and ill feelings within the family that can linger for years.
- Even a simple will is better than no will. A basic will should include an outline of what you would want to happen to your assets in the event of your death. Many wills unintentionally leave beneficiaries with the financial burden of having to pay estate taxes.
- Your will should be reviewed periodically; life events such as the birth of a child, the death of a spouse, a new marriage, or changes in your interests or lifestyle may prompt you to make changes in your will.
In the absence of a will, it is left to the probate court to appoint an administrator to oversee the estate. The administrator has the power to gather assets, value them, pay taxes, and distribute them to beneficiaries, some of whom may or may not have a legitimate claim to the assets. If you leave minor children and no will exists, it is up to the surrogate’s court to name a guardian for your children. In addition to the financial costs, this entire scenario only adds intense emotional distress to an already sad situation.
Even with an updated will, it can take more than a year to settle an estate. But when that estate is complicated by the absence of a will and includes extreme wealth and assets such as property, music, unreleased music, control of image, and more, the process could take years and cost the family significant dollars.
Should you have questions about your will or estate planning, contact me at SDitman@berdonllp.com or your Berdon advisor.
Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, New York Accountants, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.