Asked and Answered . . .


Neil Kimball on the?importance of leaving a will

By Steve Thorpe
Legal News

Aretha Franklin apparently left no will or trust. Her four sons reportedly filed a document after her death listing themselves as interested parties in her estate. Neil L. Kimball of Mika Meyers PLC specializes in business, estate and gift tax planning, estate planning, probate, business succession planning, and real estate law. He is a member of the estate planning, probate, real property and business and taxation sections of the American Bar Association, the State Bar of Michigan, and the Grand Rapids Bar Association. He also chairs the Trusts and Estates Practice Group for the firm and is also a member of the Western Michigan Estate Planning Council.

Thorpe: Prince, Amy Winehouse, Bob Marley, Curt Cobain, Jimi Hendrix and Sonny Bono all died without wills. What is it with entertainers and wills? ?

It is never news when a prominent person has a good estate plan. It is only news when they die failing to leave one. It is surprising how often a celebrity will not have adequately planned for how to leave their estate.

Thorpe: Ms. Franklin’s Los Angeles attorney has said he tried for years to get her to make a will. What are the most common reasons people resist or refuse?

Unfortunately, although we each have our own ‘deadline,’ since we don’t know when it is, it is easier to procrastinate. Also, some people have a real problem dealing with death.

Thorpe: Any horror stories? I saw Marley’s heirs were battling over his estate 35 years after his death.

If someone  dies without a will or Trust, most assets are likely to pass through probate proceedings according to state law. Having your probate estate pass according to state law rather than by a will is called “intestate succession.” It  is the legislature’s best guess at how you would want your assets to pass upon your death. Generally, all of your probate assets will pass to your closest family members. In many cases, this may be what you want to happen. However, you may be married but separated and in the course of a divorce. If you die, most of your estate will pass under state law to your spouse. You might have a child who has special needs, cannot manage money, or has drug or other problems where leaving them a share of your estate would only cause greater problems. In those situations, lack of an estate plan can be costly and it would be better to leave your assets in a trust where you can provide to whom the assets will go and how the assets will be managed for those beneficiaries.

Assets that are in a living trust do not have to pass to probate and there is greater privacy as well. If your assets go through probate, your will is filed with the court and becomes a public record. It is not likely that people are going to go to the probate court to look at your will.

However, if you are someone famous like Aretha Franklin, you know that reporters and others will make the effort to review the will and make it very public. Again, most of us don’t need to worry about that because people are not likely to be that interested in our estates.

As far as fighting over an estate goes, that can happen whether you have a plan or don’t have a plan. However, if you do have a plan, you may be able to prevent much of the fighting by making your wishes very clear and even building in a “no contest” clause to discourage a beneficiary from fighting. That clause typically provides that if a beneficiary brings a challenge to provisions of the Will or Trust, he or she will risk losing whatever share would otherwise pass to them under that document.

However, the most significant factor in whether or not there is a dispute after your death is the personality of each beneficiary. If you have children who really can’t get along with each other, don’t expect that things will be better between them after you are gone. If they don’t get along, make a plan that minimizes their need to interact with each other. In those situations, it might be best to leave everything by beneficiary designation directly to each child.

Many arguments arise as a result of how to divide your tangible personal property. Money divides easily. Who gets the big diamond ring or your favorite classic car is not as easy.

Thorpe: Is privacy sacrificed if a will is not in place after death?

Some privacy is sacrificed whenever assets pass through probate. If you leave a will and assets pass through probate, the will becomes a public record. If you don’t leave a will and assets pass through probate, the beneficiaries are your closest relatives by state law described above. It is not whether or not you have a will that results in the loss of privacy.

Rather, it is the fact that your assets pass through probate and those probate proceedings can become rather public. Your assets pass through probate if you leave them in your name alone without a beneficiary designation.

You can avoid probate by putting beneficiary designations on various assets, by leaving real estate by deed, or by placing your assets in a living trust. The trust does not become a public record.

Thorpe: Does someone always need an attorney?

There are some cases where a person can do their own estate plan without an attorney. However, they are very far and few between.

When you go to an attorney for an estate plan, make sure that attorney specializes in estate planning. I have seen many estate plans drafted by attorneys who are not knowledgeable in that area of the law.

Thorpe: What’s the first step  to get started on a will?

Gather information on your various assets and beneficiaries. Make a list of assets and how they are owned (in your name or jointly). Know who your beneficiaries are on retirement plans and life insurance. Gather copies of deeds for real property. Have a list of names, addresses, and relationships of beneficiaries.

Often the estate planning attorney will provide you with a questionnaire that will gather much of this information. However, to the extent you have put together the information in advance, it will make the process more efficient.