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Protecting your family’s legacy: It’s not just the rich and famous that have to worry
Sometimes there are lessons to be learned from constant media coverage of the lives of famous people. The recent loss of two cherished musicians offer cautionary tales about the dangers of failing to plan for our families to thrive after we are gone.
First, there is the tragic case of the American musician, record producer and filmmaker, Prince Rogers Nelson – better known as Prince. Prince died unexpectedly on April 21, 2016, at the age of 57, with no surviving spouse, children or grandchildren. Prince also had no will, trust, or other estate planning documents to provide for the disposition of his vast estate, comprised of millions of dollars in real estate, stock, cars, and intellectual property (including unreleased recordings.)
Prince’s sister and his five half-siblings are the likely beneficiaries of Prince’s estate. Because Prince failed to prepare any Estate Planning documents, the administration of his estate through the courts may take several years and result in substantial attorneys’ fees, taxes, and other costs which could have been largely avoided. One recent article estimates fees of over $5 million paid to date, even though no funds have been distributed to the estate beneficiaries.
Additionally, Prince’s legacy may be left in the hands of unintended individuals who cannot agree about the best way to preserve and respect the entertainer so many adored.
Similarly, the passing of the civil rights activist and music legend, Aretha Franklin, the undisputed “Queen of Soul”, on August 16, 2018, was devastating for her family, friends, and fans worldwide. Like Prince, Ms. Franklin failed to prepare an estate plan. She was survived by four adult children, one of whom reportedly has special needs. In addition to the difficulties of post-death administration experienced by Prince’s family, Ms. Franklin’s son with special needs may face additional troubles related to any inheritance he receives – which could have been resolved by Ms. Franklin prior to her passing.
For instance, Ms. Franklin could have established a Will or Trust ensuring that her son’s share of her estate would be held in a qualified special or supplemental needs trust (SNT), which would provide financial management for her son and ensure his continued eligibility for any means-tested government benefits or state waiver programs which provide housing, socialization, workforce training, and other benefits to disabled persons.
Although Ms. Franklin may have a substantial estate, depending on the nature of her son’s special needs, the costs of his specialized care could easily exhaust his inheritance. Additionally, many individuals with special needs are susceptible to predatory individuals, and a qualified SNT can provide protection from financial abuse.
Many parents of individuals with special needs disinherit their child or rely on other family members to take care of things. This is unnecessary and potentially disastrous. The recipient family member has no legal obligation to use the funds received for the disabled individual’s care, and worse, the funds held by the recipient are potentially subject to their future creditors (including a former spouse incident to a divorce proceeding).
A 2017 survey by Caring.com indicates that only 4 of every 10 adults have a Will or Trust. As Prince and Aretha have shown, the financial damage that can be caused by a lack of Estate Planning documents can be significant – and for non-millionaires, the damage is even more severe. For those of us with more modest estates, planning for our eventual death is vital to protecting our families. If you have questions about Wills, Trusts, or what is best for your family, call a qualified Estate Planning attorney today, and begin this important conversation.