Is Your Estate any Different than Aretha Franklin's?
As you know, we lost a pop icon last week in the passing of the Queen of Soul, Aretha Franklin. She has amassed a great fortune over her lifetime. You might have also read that she died without a will. You might be thinking (and you might be right) - A superstar dying without a will - what a mess! Then you might shift your thinking to your own situation and realize that you don't have a will either. However, you don't have as much on the line as a mega-star such as Aretha Franklin. Thus, comparatively speaking, you don't feel so anxious about not having done a will.
Let's take the average family in America. Joe and Suzy Smith are in their late 20's with two beautiful little boys. Jack is 5 and Sam is 3. Both Joe and Suzy work. Joe has a insurance policy of $500,000 on him through work and another $800,000 term policy outside of work. Suzy has $300,000 in a policy through work and $400,000 outside of work. They are in a major car accident both losing their lives. The 3 and 5 year old kids are instant millionaires, left without parents, and no legal directives on guardianship or how the money is used. However, don't worry. Joe's only living relative, Jim, has agreed to take care of them. Jim has been in therapy for some time with a gambling addiction. Between Jim and a few judges, they will figure out what is best for the boys.
Whose estate is more complicated? Joe and Suzy's or Aretha Franklin's mega million dollar estate? Both are valuable but for different reasons.
Obviously this is a dramatic illustration and is not meant to show any disrespect to Aretha Franklin. It is a very real scenario. A couple in their 20's could easily have a few million dollars in life insurance costing them no more than a $125 or so a month. A couple in their 20's could easily not have a will/trust combo to take care of their kids. Finally, the low probability of two parents dying at once could also happen.
As a parent, do you want to take even the remote chance that your kids well being is left up to chance?
Yet, probably the majority of America take that chance everyday. The reality is that is it not a difficult process to go through or an expensive one. It is however, an extremely important process to complete. My dad, before they put him into a self induced coma called for me to go home and get the will papers so he could sign them. He died a few weeks later. At the time, I had no idea he hadn't completed the process. Yet they went unsigned - the Dad of a financial advisor. People avoid the process for many reasons. However, the intention is never to leave a wake of uncertainty behind the given the worst case scenario occurring. Yet, by doing nothing that is the risk you run. The good news is that you only have to go through the process once and review it every once in a while. I write this as a reminder to get this done because the value of an estate left behind is not always measured in dollars.