By Lane V. Erickson, Idaho Estate Planning Attorney
After working as a estate planning attorney for nearly 20 years it has become clear to me that we can often learn great lessons from famous people. We are nearing the second anniversary of the death of the musician Prince who died in April 2016 at the age of 57 from an accidental overdose. After several reports it appears that Prince’s estate will top out somewhere between $250 million and $300 million dollars. It is difficult to tell the total value of his estate because sales of his music have spiked since his death. Even though it has been two years since his death, there are several lessons that we can still learn from Prince that can assist us with our own estate planning. Here are three of those specific lessons:
- Have a Written Estate Plan
Based on numerous news articles it appears that Prince died without a written last will and testament or really any type of written estate plan. You don’t have to be a famous person to need a written estate plan. Really any person including both the young and the old, single and married, parents and those without children all need a good written estate plan. The reason for this is simple. Estate planning does so much more than just give away your property after you die.
While it’s true that estate-planning can focus on giving away your property after your death, there are other parts of estate planning that will help you while you are alive. These include having valid durable Powers of Attorney, and having a power of attorney for health care. These specific documents allow you to choose someone to take care of both you and your finances and property, and to make healthcare decisions for you, if you become unable to do these for yourself. Additionally, it can help you provide for and take care of those you love into the future, whether you are still alive or not.
- If Needed Utilize a Trust
The second lesson we can learn from Prince is the possible need of using a trust as part of our estate plan. While most of us won’t have an estate the size of Princes’, we may still have a specific need for a trust as a part of our estate plan. If you do have a large estate than a trust can be a way of either eliminating or lowering the amount of federal estate tax that will apply to your estate after your death. But this is not the only use of a trust for you or your loved ones.
A trust can also be used to avoid probate
and the expenses associated with that. Additionally a trust is also useful when you are doing specific Medicaid planning for yourself or for a loved one. However, perhaps the most common use of a trust in an estate plan has to do with providing a portion of your estate to somebody who is under the age of 18, or to someone who has a disability, special needs or a handicap.
In any of these instances a trust can be used as part of a well written plan for providing a portion of your estate for the benefit of those who may not be able to handle money or property themselves directly. In this way you can benefit those individuals without causing problems in their lives.
For example, imagine that you have a child who is 14. You could use a trust as part of your written estate plan to provide for that child. Most of us would agree that someone who is 14 would not be able to handle the money or property themselves. Their legal guardian would have a right to hold that property and use it for their benefit. However, the legal guardian may use those monies or properties in a way that you had not anticipated or that you would rather that they didn’t.
By using a trust, you remain in complete control of how those monies and properties are used for the benefit of your child. You could specifically state that the money will be held and only used to aid them in their education, healthcare, support, maintenance, and perhaps other specific things that you would like. The trust can remain in effect until the child reaches a certain age at which time you can make a direct distribution to them.
- Review Your Estate Plan Whenever a Major Life Change Occurs
Once you have an estate plan in place your job is not done. It is important that you regularly review your estate plan particularly if a major life change occurs. A major life change could include the birth of a person, the death of a person, a marriage, a divorce, if someone were to move away, or just simply the passage of a long period of time. When any of these things occur you are planned may change, or may need to be changed, so that it will still do what you want.
ENLIST AN ESTATE PLANNING ATTORNEY TO HELP YOU
When it comes to estate planning or probate you should never try to do it alone. If you have questions for yourself or for your family and loved ones, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a free consultation with Lane Erickson and the Racine Olson team of Estate Planning attorneys in Idaho. You can also email Lane Erickson directly at email@example.com. We will answer your questions and will help you solve your Idaho Estate Planning problems.