Last year, when Prince died at the age of only 57, the iconic musician’s death took almost everyone by surprise – not least of his closest surviving family members, who were shocked to learn that the singer had never written a will. According to a Gallup Poll taken in May of 2016, less than half of Americans have a valid will prepared – only a meager 44 percent.
This post is the first of a three-part series in which we will explore the importance of estate law and protecting your financial legacy through common-sense strategies.
The Basic Strategy Begins with a Last Will and Testament
When someone dies without making a valid will, their estate is considered to be in what’s called intestacy. This means the responsibility of property division will fall instead to the court system. Intestate laws do differ some from state to state, but in general, a judge will attempt to distribute the assets (and debts) of the estate using the intestate succession laws as detailed in the 1990 Uniform Probate Code.
The code succession order is as follows:
● First – a surviving spouse and the children of this spouse and the deceased are usually entitled to all or most of the estate.
● Next, if the deceased has surviving parents or children from another marriage or relationship, portions of the net estate will also go to them.
● If the deceased leaves behind no surviving spouse or parents, but does have surviving children, the estate goes to them. Likewise if there are living parents, but no surviving spouse or children.
● Beyond this, the estate would pass down the logical order of surviving family members, beginning with siblings, then to grandparents, and so on.
Debts Get Paid Off Before Anyone Gets A Dime
It’s also worth noting that in cases where there is no will, the estate will first be used pay off taxes, debts and other financial obligations, and the remainder left after that is what will be distributed according to the code. While this is a way to attempt to distribute an estate as fairly as possible with no instructions, this might be far from what the deceased intended.
The sudden death of Prince combined with the lack of a valid will has left his purported $300 million estate in disarray, to be doled out among several siblings and a few mysterious possible heirs as well.
Prince, however, is far from the only famous person to have passed away without providing a will. In fact, this happens more often than you might expect.
Here are a few other notable cases of intestacy.
● Abraham Lincoln – Despite beginning his professional career as a lawyer, our 16th president never wrote a will. When he died in 1865, his family was able to contact David Davis, a sitting Supreme Court Justice at the time, to act as the administrator of the Lincoln estate, but the rest of us won’t be so lucky.
● Jimi Hendrix – The legendary guitarist died at the very young age of 27 without ever writing a will, which left his estate in an incredible amount of chaos, still being battled in court 40 years later. Without a will to indicate what his wishes would have been for dividing his property and assets, his estate went to his father and adopted sister, rather than his biological brother with whom Hendrix was very close.
● Stieg Larsson – When the acclaimed author passed away suddenly in 2004, he had no will in place to ensure that his estate would go to his girlfriend Eva Gabrielsson, who had been his partner for 32 years.
Don’t Make the Mistake of Thinking the Courts Will Do What Makes Sense
Obviously, estate planning mistakes don’t apply only to the rich and famous – but the high profile nature of the lives celebrities lead means that when they do happen, we all hear about them. This unfortunately means that sometimes, these high profile mistakes can serve as the best examples of how disastrous mishandling your financial plans can be for the loved ones you leave behind.