Latest News

: What Coolio, Prince and Picasso didn’t have that you should

0

When the rapper Coolio died in September, he joined a group of notables that includes Prince, Howard Hughes and Pablo Picasso — all of whom died without specifying who should inherit their money and estate.

Coolio, whose legal name was Artis Leon Ivey Jr., died at age 59 after being found unresponsive on the floor of a bathroom at a friend’s house, according to media reports. An official cause of death has not been determined.

Coolio’s former manager, Jarez Posey, recently filed a probate case to appraise the late “Gangsta’s Paradise” artist’s estate, according to the Los Angeles Times.

The filing named Coolio’s seven adult children, who reportedly now wear his ashes in necklaces, as his next of kin and the probable beneficiaries of his estate. He also had three other children who are still minors.

The estimated value of Coolio’s estate is more than $300,000, including “personal property and demand deposit accounts, financial accounts, insurance policies and royalties,” according to media reports. 

Coolio is far from alone in not having drawn up a will. According to a 2021 Gallup poll, fewer than half of U.S. adults, just 46%, have a will that outlines how they want their estate to be handled after their death.

“It’s a touchy subject — talking about your own mortality is hard to deal with. People often put their head in the sand and figure they won’t be around to deal with it. But it’s important,” said Kelly Webber, director of account administration at Spinnaker Trust in Portland, Maine.

The experts are pretty much all in agreement on this topic. 

“There’s so much to this and no one wants to talk about it. Why grow the money if you don’t take the hard steps of protecting it and deciding where it goes?” said Eric Bond of Bond Wealth Management in Long Beach, Calif. “It’s a disaster. Not many people focus on the foundation of estate planning. It’s the bedrock of life.”

Also read: Chicago man’s $11 million estate to be divided among 119 distant cousins who never knew him

If you die without a will — known in legal terms as dying intestate — a local probate court then has to decide how to distribute your property. That process can take months or even years to sort out, depending on the complexities of the estate, and the outcome may be different than what the deceased wanted, legal experts say.

“In some states, the probate process is very costly and arduous to get through,” Webber said.

And a will is only one part of the estate-planning process — “just one tool in the toolbox,” said Patrick Simasko, an elder-law attorney and financial adviser at Simasko Law in Mount Clemens, Michigan. “You need a whole toolbox of documents, from a medical power of attorney to a financial power of attorney and beneficiary designations on all your accounts.

“People think a will controls everything, but it’s all about the beneficiaries,” he said.

For example, if you have a beneficiary listed on your 401(k) plan, that designation would override any wishes stated in your will. So it’s important to make sure your beneficiaries and secondary beneficiaries are up to date on all your accounts, Simasko said.

“For 99% of the planet, a will doesn’t mean much. The beneficiary designations are what matter. If you don’t have those designations, then the will comes into play,” Simasko said.

And if someone is cut out of a will who would normally get an inheritance, such as a spouse, they can contest or challenge that will, Webber said. 

Also read: Do your parents have a will? Is it up-to-date? How do you even ask?

For estate planning, the other documents you need to maintain include a durable power of attorney, which states who can make financial decisions on your behalf if you are incapacitated; a healthcare power of attorney, which names a person who can make medical decisions for you if you are unable to make them for yourself; and guardianship designations if you have minor children.

These documents and beneficiaries should be reviewed every few years or after any major life changes, such as getting married or having children, experts say.

Other accounts, such as brokerage accounts or bank accounts, can have “pass on death” or “transfer on death” designations that would immediately put the funds into the hands of the person of your choosing upon your death, Webber said.

Other things to consider are a letter of intent in which you describe for the executor of your estate what your final wishes are regarding your burial or funeral. A letter of intent is not legally binding for monetary items, though, so your wishes regarding your financial estate should be in the form of a will, Webber said.

Also read: My spouse died just after we sold our second home, how do we handle the taxes?

You can designate who will receive tangible assets, such as your grandmother’s pearls or your favorite china, in a separate list that typically should be signed and referred to in your will. One benefit of maintaining such a list is that you can update the beneficiaries of your tangible personal property without having to update your will itself, Webber said. 

The list should not contradict anything in your will, however, and it should clearly describe the items. It’s also a good idea to include contact information for specific beneficiaries to make sure the items find their proper home, Webber said.

Better yet, you can start giving away some of your belongings before you die, Bond said.

“Put names on the paintings and furniture now so it doesn’t become a family fight later,” Bond said. “You’d be amazed what families fight about.”

Now read: 6 New Year’s resolutions for retirement: Back to basics

Futures Movers: Oil prices log a yearly rise in volatile 2022

Previous article

Revolution Investing: 11 predictions for money, technology, stocks and crypto for 2023

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News