Florida fans of the musician Prince may be aware that he died without a will and that this had led to issues in settling his estate. Aretha Franklin also died without creating an estate plan despite the fact that she has four children and one of them has special needs.
In both cases, because of the size of their estates, a hefty amount will be taken out for taxes. Furthermore, their estates must pass through probate, which is a public process. Celebrities and other prominent people often prefer an estate plan that allows them some privacy. Not having an estate plan can have serious consequences even for people who are not rich or well-known. Despite this, 42 percent of baby boomers and nearly two-thirds of Generation Xers do not have a will. Most say they simply did not get around to it. One of Franklin’s attorneys says that he urged her to make an estate plan, but she did not follow through.
An attorney may help a person create a will, and the person might want to draw up a trust as well. A trust may be particularly important if a person has a child with special needs. A special needs trust keeps the assets separate from the child’s regular assets and allows the child to keep drawing government benefits.
There are other important reasons to create an estate plan. For example, powers of attorney appoint people to manage a person’s finances and healthcare if the person becomes incapacitated. Without these, family members may have to go through a long and costly court process. The same is true if guardians need to be appointed for minor children. A will can help families avoid this by naming a guardian. A person may also want to discuss trusts and other estate planning strategies with an attorney.