Proper estate planning can save your heirs the hassle and expense of probate and conservatorships, estate taxes, and contested court proceedings.
Just weeks after Prince Roger Nelson’s death in 2016, dozens of people filed petitions in the Carver County District Court in Minnesota, claiming a piece of the music icon’s estimated $300 million estate. Some claimed to be his illegitimate children, others to have been adopted by him, one claimed to be a descendant of his great-grandfather, and another simply demanded a DNA test.
A probate judge was tasked with sorting out the colossal mess that was Prince’s estate, a mess that could have been avoided entirely if the Artist Formerly Known as Prince had an estate plan! Since then, the estate administrators have reportedly racked up $45 million in expenses, including $10 million in legal fees. The estate taxes, which have not yet been paid, will consume 40% of the estate. The State of Minnesota will collect another 16%.
The taxes, legal, administrative, and probate fees are costing Prince’s heirs the bulk of their inheritance. These amounts could also have been significantly reduced had Prince put together the type of estate plan that was warranted by his vast fortune.
Here are a few good reasons to take care of your estate plan now:
YOU decide who gets what
If you don’t make the decision who gets your assets, they will be distributed in accordance with state law. There are many options available for the distribution of individual items, cash, real estate and business interests — your estate planning attorney can help you decide the most efficient and cost-effective way to arrange for their distribution, through a will and/or a living trust.
Personally identifying your heirs, and planning a fair distribution of your assets given your family’s particular circumstances, is the best way to protect your loved ones and avoid will contests.
YOU make plans for your minor children
If your children are minors, your estate plan will designate the guardians to care for them, how the money that you leave for them will be managed, and at what ages they will receive distributions (for example, you can designate that your trustee give them whatever cash they need for their education, plus 10% at age 21, 25% at age 23, and the rest at age 25).
If you don’t make any plans for them, any of your relatives can claim your kids and the court will decide how their inheritance will be managed. In any case, whatever isn’t used up when they are minors will probably be paid out to them in full when they reach the age of 18!
YOU minimize taxes and probate fees
Probate fees in California can easily reach the tens of thousands if you own even a single piece of San Francisco real estate – fees which can be avoided entirely with a Living Trust. Proper estate planning can also save wealthy individuals and couples significant estate taxes.
YOU decide how you will live during any short- or long-term incapacity
Having an estate plan isn’t just about who will get your hard-earned assets when you no longer need them – it is also about who will look after you and how you will be cared for if you become incapacitated. You can provide instructions on the management of your assets through a Durable Power of Attorney for Assets and/or a Revocable Living Trust.
YOU make your own end-of-life decisions
Through an Advance Health Care Directive (“Living Will”), you can provide guidance for your family and physicians for end-of-life decision-making. Your Last Will and Testament usually specifies whether you wish to be buried, cremated, or prefer an alternative disposition of your remains.
YOU can change your mind!
With few exceptions (such as irrevocable trust instruments designed to minimize estate taxes for the very wealthy) you can modify, or even revoke, your estate planning documents if your needs or wishes change over time.
Estate planning attorneys in San Francisco
At Moskowitz, LLP, we consider estate planning as simply “getting organized.” This helps to remove much of the stress and anxiety for our clients and helps them move forward with essential planning that will benefit them and their loved ones. We provide extremely personalized estate plans and review them in detail with our clients to ensure that they are understood and reflect exactly what our clients want. Call us today to set up an initial consultation.