When a Prince errs: Learn from the star’s estate planning mistakes
Even Hollywood royalty can make mistakes. This was highlighted by the recent revelation that music mega-star Prince did not have a will. The star’s mistake provides an opportunity for countless others to learn from this error.
Prince was not alone; failing to put together a will is one of the four most common estate planning mistakes. A recent piece in Forbes discussed these mistakes, noting that three other common missteps in estate planning include:
- Update your plan. It is extremely important to update an estate plan on a regular basis. Life events like marriage, divorce, death and birth of new family members should trigger a review. Without updating these documents, important people may be left out or assets may go to those that you would prefer not benefit from your estate. In addition to these events, the law changes. Tax law plays a big role in estate planning, and these laws can change every year. If the plan is not adjusted to reflect these updates, you could take a much bigger tax hit than you planned for.
- Consider a trust. This does not refer to trusting your loved ones, but instead to the legal tool. A trust is a legal tool that can be used to help protect assets from creditors or to reduce tax obligations. The benefits depend on the exact language used to structure the trust. The strength of a trust often depends on the language used to set it up. As a result, it is often wise to have an attorney structure this instrument to better ensure it would survive if challenged in court.
- Plan for disability. Accidents can happen to anyone and these accidents could result in permanent or temporary disability. In these instances, a well balanced estate plan will also account for who should make financial and health care decisions when we are unable to do so ourselves. Documents like powers of attorney and living wills outline our wishes, helping to ensure that another person does not move forward with treatment or financial decisions that aren’t in line with our plans.
Those who put together estate plans can begin reaping benefits immediately. In addition to the peace of mind of knowing that your estate is taken care of, benefits including tax savings and protection of assets from creditors can also be present. A will and trust attorney can discuss these and other options.