The story of Prince’s death has been getting a lot of media attention, and for good reason. Because Prince died without a will, it is unclear who will inherit from his estate. When someone passes away without a will, it is called dying “intestate.”
Why should this matter to you? I hear many excuses for not planning. “I don’t have that much anyway,” or “I just haven’t gotten around to it.” The list goes on. According to a 2014 survey released by Rocket Lawyer, 51% of Americans age 55 to 64 don’t have wills. If you, like Prince and the majority of Americans, do not have a will, here are the basics of what you need to know.
Sorting it Out
When you pass away, someone needs to obtain the authority to manage your property. This is called “probate.” The court will appoint a “Personal Representative” (sometimes called an executor), who will be in charge of collecting and managing assets, paying expenses and debts, and distributing the estate. Without a Will designating this person, the Alaska Statutes dictate who will do the job. Should the family members, blended or traditional, disagree over who, exactly, should be in charge, you have the potential for prolonged controversy.
The next glaring issue is division. Without a will, the State directs who will receive your estate. There are specific formulas to calculate how much a surviving spouse and children will receive, but there is no provision under Alaska law for non-spouse life partners, friends, or stepchildren. And if you have no spouse, children, or surviving parents, it does not matter that you haven’t spoken to your brother in twenty-three years. He will be getting the same share of your hard-earned life savings as your sister who sends you jam every Christmas. If you want to avoid this, you need an effective estate plan.
If you are now thinking, “I am going to go see an estate planning attorney tomorrow,” great: mission accomplished. If you are instead thinking, “Oh good, I’m so glad we took care of that back when Ronald Reagan was president,” think again. Regular updating is just as important as getting an estate plan in place. Your family may have changed or grown. Sometimes the beneficiary designations (think life insurance, retirement accounts, investment accounts, etc., which are not controlled by your will) are not up to date. Guardians for minor children may also need to be updated. For snowbirds, be aware that a separate probate will need to be opened in each state where you own real estate, unless you implement a living trust. A trust, if done correctly, allows your entire estate to be administered without court involvement.
Estate planning is something we should all think about, even those of us who aren’t pop stars like Prince. If you don’t want to leave your friends and family with an emotional and expensive mess, learn from Prince’s mistake. It’s time to get your estate plan in place.
Chelsea Ray Riekkola, Attorney
Foley, Foley & Pearson, P.C.
Our guest author this week, Chelsea Ray Riekkola, is an attorney at Foley, Foley & Pearson, P.C. Chelsea was born and raised in Alaska, she received her J.D. from the University of Oregon, with a focus on estate planning and probate law. She is published in the American Bar Association Journal of Real Property, Trust and Estate Law on handling digital assets after death. You can learn more about Chelsea and Foley, Foley & Pearson, P.C. by visiting their website.