Most people are aware by now that Prince, the performer, passed away recently at the age of 57. So far, no one has been able to locate his will.
Unlike most of us, Prince had a huge amount of assets held personally, in his own name. That means a long probate process and lots of fees for the lawyers. And that’s without any dissension among his family members.
For the rest of us, most of our assets are jointly owned or have beneficiary forms. Real estate, investment accounts, checking and savings accounts are usually jointly owned. Retirement accounts, annuities and life insurance have beneficiary forms. Those types of assets will pass outside of a will and the probate process, as long as the other joint owner or beneficiary survives us.
The lesson to be learned, even before any legal action occurs regarding Prince’s estate, is that your estate planning documents need to be up-to-date. These documents need to be checked regularly, especially after a life event such as a birth, death, or a divorce.
In a best case scenario, when beneficiary forms or the title to jointly owned property are not updated, they will pass in accordance with the terms of your will, assuming you have one. In a worst case scenario, you are trading the ability to use your plan for passing on your assets for the government’s plan. The rules of intestacy in your state will determine who inherits your assets. Of course that will be only what remains of your assets after court fees and attorney’s fees have been paid. If your heirs are contentious and litigious, there will be even less for some of them to inherit.
So, don’t be like Prince. Don’t ignore your estate planning documents. And if you already have them in place, don’t stop there. Review them every once in a while. Perhaps now is a good time to do that.
By Beverly DeVeny
Copyright © 2016 Ed Slott and Company, LLC Reprinted from The Slott Report, 05/20/2016, with permission.
Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.