A Michigan jury has ruled that the will found on Aretha Franklin’s couch is valid, potentially ending a five-year battle over her estate. Five years of wrangling and legal bills may not be what the legendary singer envisioned for his family after his death. However, arguments and more can happen if you don’t have a proper estate plan in place.
While Franklin’s case may be extreme, finalizing an estate still takes an average of 16 months, 400 hours and $12,400 in fees, according to a study commissioned by estate planning and settlement firm ClearEstate. But that doesn’t have to be the case for your loved one.
Consider these five estate planning tips for your family respect Your wish.Otherwise, settling your estate may it hurts like hell.
1. Start with some basic tools
When you create an estate plan, you’re creating a toolbox, says Patrick Simasco, a senior attorney and financial advisor at the law firm Simusco in Mount Clemens, Mich. “Aretha Franklin had a tool: her own will,” Simasco said. While a will is a powerful estate planning tool, there are other simple tools you need to protect yourself and your loved ones—life and death.
will or trust
When they go to work: After your death (but living trusts, during your lifetime)
why they are powerful tools: because you can say what
Often considered the cornerstone of any estate plan, a will or trust details who gets what and when after your death. While thinking about death isn’t anyone’s favorite topic, skipping the process can plunge your loved one into struggles similar to those of the Franklin family.
If your finances and assets are relatively simple, you may find that a basic will suits your needs. If your financial situation is complicated, or if you live in a state where the probate process is known to take a while, a trust may be the better vehicle. Fortunately, we have two guides to help you learn more: Everything You Need to Know About Wills and Your Guide to Trusts.
living will
When it starts working: in your life
Why it’s a powerful tool: Here is a document that can relieve the stress of a loved one
Guys, it’s time to talk about the worst. If the unthinkable happens, like a car accident or a heart attack, you’re less likely to make your own decisions about emergency care. A living will tells doctors and other medical professionals what you want to do (or not do) to prolong your life.
For example, you may need all the extras today – CPR, life support, and so on. But how you feel may change later in life or if you have a long-term illness. A living will can prevent your loved ones from making these decisions during stressful times.
Medical Power of Attorney (POA)
When it starts working: in your life
Why it’s a powerful tool: This doctor appoints someone you trust to direct your medical care
everyone has a family member they would rather be blind Instead of making that person responsible for their health care decisions. So lead the late great Etta James to have your family respect your decisions as Aretha did, and to appoint someone you trust to make them when you cannot Your health care decisions.
With a medical POA, you name a person who can name someone for you if you cannot make decisions about your medical care. If you are hospitalized for treatment, many hospitals can help you with a primary care POA. You can also set one up in advance. Just make sure the person you designate as the POA knows they have been appointed and has a copy of the document.
Financial POA
When it starts working: in your life
Why it’s a powerful tool: This document designates who you trust to manage your funds
Aretha Franklin’s estate is worth more than $80 million. While you may not have much in the bank, your financial situation still deserves the attention of someone you trust. A financial POA designates someone to handle money, in case you can’t.
A financial POA can cover financial decisions large and small, such as only allowing someone to pay your electricity bill from your checking account if you are incapacitated in the hospital or sent overseas.
guardianship order
When they go to work: when you die
why they are powerful tools: It protects your child, which is great
If you have kids, imagining that you won’t be there to watch them grow is the worst possible idea. This is why parents and legal guardians with minor children need to have a guardianship order. “Once you start a family, it’s a good time to make sure you have the paperwork in place so that someone will take care of your minor children and take care of their finances,” Simasco said.
You can create a guardianship order through your will or trust. In these documents, you name a preferred legal guardian for your child (who may be your child’s other parent or family member). You can also appoint a second guardian if your first choice cannot take responsibility.
2. List your assets (and liabilities)
According to ClearEstate co-founder and CEO Davide Pisanu, any well-planned estate tries to minimize the tasks required of the person you appoint to make your wishes come true. Why? Most people who have served as executors or trustees of a deceased loved one’s estate say it has been one of the most difficult experiences of their lives.
To ease the workload on your executor (will) or trustee (trust), take the time to list your current assets, liabilities and digital accounts. The list should include the following:
- Bank Account. Includes all checking and savings accounts, including bank and account numbers. If you have access to online banking, please provide your username and password.
- investment account. From a brokerage account to a retirement account like a Roth IRA or employer 401(k), take note of the username, password, website, and if necessary, the phone number of the company holding the account.
- outstanding loan. Your mortgage, car loan, and any personal loans should be listed, including contact information for each lender.
- credit card account. Don’t forget to include major and store credit cards (such as your Amazon card).
- Life Insurance Policy. Include policy number, value, and contact information for the insurance company.
- online account. These include streaming subscriptions, meal kit services, and more.
- email account. List your email address and password.
If you’re concerned about the security of keeping all this information on a single piece of paper in your desk drawer, consider a digital vault. “In the past, people used safes at banks or other mechanisms at home, but I think digital solutions are safer than these traditional solutions,” Pisanu said.
Digital vaults are also designed to grant access after the executor’s death. In contrast, a financial institution may force your executor to struggle to gain access to a safe.
Tip 3: Designate beneficiaries for all your accounts
While Aretha references can get tedious, it’s important to name your beneficiaries wherever possible. Even if you forget to make your will (or lose it in a couch cushion), naming beneficiaries of certain accounts means they can bypass probate (the legal process to verify a will) and distribute assets directly to those you name .
In fact, naming beneficiaries takes precedence over a will. So even though your will states that Johnny should receive your IRA, if your IRA beneficiary is Tommy, Tommy will get it.
You can and should credit beneficiaries to:
- Bank Account
- taxable brokerage account
- Individual Retirement Account (IRA)
- 401(k)s and other employer-sponsored retirement accounts
You can also jointly register certain assets and accounts through Joint Tenants with Right of Survival (JTWROS). This type of registration automatically transfers account ownership to the co-owners upon your death.
Alternatively, you can register the account as a transfer on death (TOD), which means that your share of the estate will pass to your named beneficiary upon your death.
Assets that can be registered as JTWROS or TOD include:
- non-retirement bank account
- Nonretirement Brokerage Accounts
- real estate, such as your home ownership
- car
Tip 4: Get help from a lawyer (it doesn’t have to be expensive)
Thanks to the internet, you can DIY almost anything these days, but that doesn’t mean you should. Online estate planning sites have “great documentation,” but they’re only as good as the person…putting it all together, Simasko said, and that person is you.
If you have questions about estate planning documents created online, or want an attorney to handle the process, there’s no shame in asking for help.
Many online estate planning sites offer a single point of consultation with an attorney. You can also contact an attorney who specializes in estate planning (many are board certified, depending on the state) or an older attorney.
Before working with an attorney, it may be helpful to read online reviews and check the website of your state bar association for any complaints or disciplinary actions against them.
Tip 5: Talk to me, talk to me
Let’s be honest, talking about death probably isn’t your favorite first thing to do. But when you’re away, starting tough conversations with your loved ones can make things a lot easier. “One of the biggest problems with death is that we don’t talk about it,” Pisanu said.
There is no one correct way to explain to your loved ones what you have listed in your estate planning documents. You can have the conversation with a view from 36,000 feet and just list the basics: the name of your executor or trustee (which will serve as your power of attorney), and any other details about who gets what you want to share information. You can also list everything in detail. You know your family and loved ones best and can choose what works best for you.
If you want to check that your parents’ affairs are in order, sharing your recently completed estate plan can be a conversation starter, Simasko says.
“They’ll say everything’s in order, because back in 1984, they took you to Disneyland and got their wish,” he said, but added that a one-and-done approach might not be enough.
Just imagine how different things might have turned out if one of Aretha’s children had asked about her estate plans. Will wills come out of the couch cushions and avoid years of conflict? perhaps. But everyone’s estate plan deserves a regular review, and for major life events like buying a home, moving, getting married, divorced, and dying.
takeout
Aretha Franklin deserves to be remembered for her music, not for the dangers of estate-planning missteps. Her legacy will live on in her songs, and these estate planning tips can ensure your estate, no matter its size, is as good as your loved ones.
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