“Thieves in the Temple”: Prince dies Intestate

Music icon Prince died on April 21, 2016. Reports indicate his estate is worth between $100-$300 million dollars, and growing. A little more than a month has passed since Prince’s death and the hot topic is that Prince  had no estate plan.

No Trust, No Will, Nada. Therefore, his entire estate is going to be probated by the Minnesota probate court. And it could take years and possible millions to probate.

As mentioned several times, over in previous posts, when a person dies with no estate plan, they are considered to have died intestate. Each state has intestacy laws that allow the state’s probate court to probate and administer the estate. Intestacy laws are basically a state’s way of speculating who a person would have selected to inherit their estate.

Prince had no spouse nor children. Both of his parents are deceased. So, his heirs are his six (6) siblings. One (1) full sibling and five (5) half siblings. In Minnesota, half siblings are entitled an equal share of an estate, just like full siblings. Therefore, Prince’s estate could be split in six (6) equal parts.

Now, on the surface this does not seem like a major issue. Prince had six (6) siblings, surely he would have left them something in his will, right? Well, maybe. I have yet to see a report indicating he had intentions to disinherit any of this siblings. BUT, if he did intend to disinherit any of them, with no estate planning documents, those intentions are lost. Similarly, any intention to leave money to charities, churches, friends, etc. are also lost.

Recent articles have surfaced detailing that Prince was devout in his religion and would have wanted to leave something to his church. Others speculated there were several charities he would have wanted to share in his estate.

Moreover, Prince’s entire “musical catalog” is now under the control of the named estate administrator, including several unreleased songs. The lack of an estate plan means no one knows if those unreleased songs are supposed to stay private or be released. Furthermore, the fate of the rest of his music now rests with the estate administrator.

What is known is the Minnesota probate court is going to have a long and probably complicated road ahead trying to administer this estate.

What many fail to understand is estate planning is vital for anyone with assets. Only you know where you wish your estate to be distributed. Do you want to disinherit a child? You need to have it in writing. Do you want to leave money to a charity? You need to have it in writing. Do you want to have money set aside for a niece, nephew, grandchild, etc. in a trust? You need to have it in writing.

A lack of an estate plan means your estate is open to the public, anyone who believes they should inherit can make a claim, and it will cost your heirs time and money in court battles and attorneys fees.

Keep the “thieves out of the temple” by creating an estate plan.

 

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Benefits of Separate Share Trusts

In the past month and a half I have noticed an increase in prospective clients wanting to know more about protecting assets for a child/beneficiary who has one or combination of the following issues: financial, medical, addiction, or spousal.

When developing an estate plan, it is paramount you understand how distributions work and what that means for your potential beneficiaries.

For example, a married couple has two children. One child is capable of managing their assets, has a job, no financial issues, and supports their family. The other child, however, is an alcoholic or an addict, cannot keep a steady job, and is in financial trouble. The first child would have no issues receiving a sum of money from an estate, whereas, the second child would have some major issues.

For instance, if the second child was an alcoholic and received a sum of $10,000.00, how long would it take the second child to drink up the entire inheritance? Would they survive having that much money to spend on their addiction?

Or what if the second child had a judgment against them or owed creditors money? The inheritance would be gone as soon as they received it in order to settle the debts.

Is that really what the clients would want for their estate? For it to be spent enabling their child’s addiction or to be used completely to pay for creditors? For most, the answer is no. The intention is for any inheritance to be used for the benefit of the child, not to settle debts or feed an addiction.

One prospective client made the comment, “I never expected to have to worry about my adult child inheriting my estate.”

One sure fire way to guarantee an inheritance is used for the benefit of the child/beneficiary is through a separate share trust. A separate share trust can be included in any revocable living trust plan or be drafted into your will.

If the separate share trusts are included in a revocable trust, they come into being after the grantor(s) have passed. Instead of the trust being distributed outright to the named beneficiaries, any designated share would be moved to the specified separate share trust and managed for the beneficiary.

Similarly, a separate trust included in a will comes into existence after the estate and will have been probated. Instead of an heir receiving a distribution, the separate share trusts are created and managed for the beneficiary.

Separate share trusts mean the assets are never transferred into the name of the beneficiary. By the assets remaining in trust, creditors cannot reach the assets to settle the beneficiaries debts. If the beneficiary were to go through a divorce, the inheritance would not be a part of the marital estate. If the beneficiary was struggling with addiction, the separate trust could specify the amount the beneficiary was allowed to receive per month, specify the beneficiary could use any amount necessary for  rehabilitation, specify upon proof of sobriety for a certain period of time would allow an increase in the distribution, etc.

The beauty of a separate share trust is they can be tailored to the specific issues and needs of the beneficiary. Whereas, if the beneficiary were to receive an outright distribution, there is no control over how the inheritance is used.

This is the number one reason why it is important to update your estate plan and talk to an experience estate planning attorney. Life happens. People’s situations change as years go by and it is vital that you make sure your estate plan is equipped to handle the circumstances of your children/beneficiaries.

Separate share trusts are an extremely useful tool to have in your estate planning toolbox. Talk to an estate planning attorney today to learn more about separate share trusts and whether or not they are right for you and your estate.

 

 

 

Technology and the Elderly

An interesting article was brought to my attention by my boss this morning, one he thought would be a good one to read and post on my blog. He was right. I attempted to reblog the article directly to the blog, but the links were not working on the article to allow such a thing.

The article, entitled “Tech can help the elderly .. if they use it.” was written by Kate Harloe. If you click here, you can go directly to the article and read it for yourself. Which I highly recommended, as it is a very good article.

The basic gist of the article is how “age tech” , meaning apps and technology for the elderly, is a growing market and how helpful these technologies are for those in the caregiver role.

For example, Harloe writes, “More than 34 million American adults provide unpaid care to someone 50 or older, according to a survey conducted last year by the National Alliance for Caregiving. And the US Census Bureau says the number of people who need care will only grow: By 2060, the 65 and older age group will more than double, to 98 million people (from 46 million in 2014)

The increasing number of people who will need care mean that caregivers, especially unpaid caregivers, are always looking for way to better assist them in caring for their loved one.

As Harloe discusses the positives with “age tech” she also discusses the negatives. First, she mentions how many caregivers:

“Find that incorporating technology into their routines isn’t so easy. A recent survey of roughly 2,100 respondents by Caring.com found that less than 15 percent of families incorporate these types of products.

Experts say part of the problem is that the young, mostly-male tech programmers making these devices don’t have a good enough understanding of the lives of unpaid caregivers, who tend to be older women. The result is that some products aren’t designed as thoughtfully as they should be for their potential users.”

Other drawbacks mentioned were the difficulty in troubleshooting these apps and devices, as well as, a caregiver having the time to find one, learn how to use it, and implement it in their caregiving routine.

Despite the negatives, there are those out there, according to Harloe, who are working to solve the issues with “age tech” so that the task of caregiving less burdensome.

She ended her article with “Technology makes a difference.” Which is true. Technology is one commodity that has the ability to be extremely helpful and make a difference in someone’s quality of life.

The boom of “age tech” is reassuring to me. Once those developing these “next big ideas” start developing them with an understanding of the life of a caregiver, they could usher in a new era of caregiving. And lets be honest, isn’t that what we should be striving for? To provide better caregiving services to those in need?

To read the original article click here.