Prince Died without a Will…
Legendary musician, Prince, recently died suddenly at age 57. Prince had a reputation as a meticulous businessman and had accumulated an estate worth $300 million. It’s inconceivable that he would never take the time to draw a last will and testament, but that’s exactly what happened. My best guess is that as a result, his estate representative will spend millions of dollars and perhaps decades settling his estate. What a financial tragedy!
That brings me to you and your estate plan and two questions. Do you have a will? If your answer is, “Yes, of course I do!”, my next question is, “Is your will up-to-date and are you certain what it says?
If you die intestate, or “without a will”
Let’s deal with the first question by assuming you don’t have a will. In Alabama, any assets that don’t pass at your death by either title or beneficiary designation will pass as follows:
- Married, no children or parents living. If it’s just you and your spouse, 100% goes outright to your spouse.
- Married, no children, one or both parents living. Here, your spouse will receive the first $100,000 of assets plus one-half the balance. The remainder goes to the surviving parent(s).
- Married with children. If you have children, the state dictates that the first $50,000 goes to the surviving spouse plus one-half of the remainder. The balance goes outright to the children. Note that if the children are ‘minors’, they cannot receive property outright and, generally, the probate court judge will appoint someone as the ‘conservator’ (something like a financial custodian) to oversee the money for the benefit of the child or children. While you may assume your surviving spouse would manage the money for your children, there is no assurance of this since it’s up to the court’s discretion. Don’t forget, the conservator gets paid from your assets!
- Unmarried, no children but one or more parents living. If you are not married and have no children, then 100% of your probate estate will go to your parents equally.
- Unmarried, with children. If you are unmarried and have children, then 100% of your probate estate will pass equally to your living children. Note that if any of them are minors, the same rules regarding the legal conservator apply.
- Unmarried, without children or surviving parents. In this case, your probate assets will go to your siblings, equally.
Is Your Will up-to-date?
Under my second question, if you do have a will, take a moment to review it in light of the current value of your estate including your home and other real estate, life insurance, retirement and other investment plans along with personal property. If you’re married, your assets likely go to your spouse but think for a moment about the next level of heirs. If it’s your children, are they capable of handling the amount of money they will receive? If not, consider the value of using a trust.
One final thought. While your will directs the transfer of probate assets, many assets move based on either title or beneficiary designation. I encourage you to double-check how these assets are set to transfer. I cannot tell you the number of times a client has been ‘certain’ of a beneficiary designation or joint title only to find out they were wrong once we reviewed the actual documents.
Having a valid will is very important for every adult. Intestate laws vary by state. For a state-by-state guide, visit www.WelchGroup.com; click on ‘Resource Center’; then ‘Links’; then ‘Intestate Succession Laws- State by State’. Your best choice is to consult with an attorney who is skilled in wills and estates.
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