- Thomson Reuters
A judge recently confirmed that Prince did not have a will at the time of his death.
That could mean a potentially “messy” future for the musician’s $250 million estate.
Sure, most of us do not have a net worth valued at $250 million – but estate planning isn’t just important for Prince and other high earners.
“Everybody, when you get to a certain point in your life, should have an estate plan,” emphasizes David T. DuFault, estate planning and business law attorney at Sodoma Law. In his experience working with clients, “A lot of people are unprepared. Either they don’t have a plan, or they have a plan, but haven’t looked at it in 20 years.”
To help you get started, we’ve highlighted a few important things to know about drafting a will and creating an estate plan.
Mandi Woodruff contributed to this article.
- Jeff J Mitchell/Getty
There isn’t one set time to start estate planning
“Your situation is going to affect when you start estate planning,” DuFault says. Typically, there are “trigger events” – big life events such as getting married, having kids, and buying a first home – that signal it’s time to start putting together an estate plan.
“A 24-year-old right out of college who’s not married may not be as pressed to start as a 30-year-old that has a house, 401(k), and a child on the way,” DuFault explains.
That being said, people in their 20s and early 30s go through plenty of life changes that deem it important to start creating a will early in life. It’s never too early to start thinking about who you would leave your assets to if you were to pass away.
It’s easier to set up a will than ever before
RocketLawyer and LegalZoom are just two of several sites that offer will-making services at affordable rates. They work much like software like TurboTax, which hits you with a host of “interview-like” questions.
Unless your assets are incredibly complicated, you can draft a will in about 10-15 minutes, RocketLawyer founder Charley Moore tells Business Insider.
You have to make your will legal
Once you’ve got your will drafted and signed, you’ve got one last step to take: making it legal.
This varies state by state, but generally you’ll need to have at least two witnesses sign the document.
Once you have all signatures needed, scan the document back into your computer for safe keeping and also keep a hard copy on file, Moore advises.
If you don’t draft up a will, the state decides what happens to your assets
“If you die without an estate plan that includes a will, you are considered to have died intestate, and the state where you live will determine who gets your assets as determined under the state’s inheritance laws,” certified financial planner Cathy Pareto explains on Investopedia.
As DuFault puts it, “The state has created a will for everybody – it just may not be the will that you want. Being able to establish what you want, rather than relying on the court or a third party as your advocate, is always a better choice than not.”
- Getty Images/Carlo Allegri
Estate planning means more than just creating a will
“A lot of people think, ‘If I have a will, I’m covered,'” DuFault tells Business Insider. “But estate planning is much more than that.”
According to Moore, a will is one of the three most important documents every adult should have. The other two are:
A living will: Also called an advanced healthcare directive, a living will is where you lay out all the nuts and bolts of your end-of-life care. If you wind up in a coma or unresponsive in the hospital, a living will can help your family decide how to handle your medical treatment.
Durable power of attorney: Choose an attorney you trust to administer your estate after your death, Moore says. He or she will be objective (unlike family members) and their entire job is to follow your wishes.
Consider getting professional advice
DuFault recommends doing your own, initial research and then finding an estate planning attorney for guidance. “There are a lot of moving pieces when you’re dealing with an estate plan and an attorney can walk you through the process, give you tips depending on your situation, and bring up questions that you may not have thought of.”
If you decide to meet with an estate attorney, make sure they’re located in your area, DuFault emphasizes: “Laws are different depending on which state you live in. If you’re not dealing with a local attorney or somebody familiar with your state laws, you could end up in a situation where your will is not valid or it doesn’t do the things you expect it to do.”
- Flickr/Laura D’Alessandro
There are online resources available
As Tara Siegel Bernard of the New York Times reports, there are several sites designed to ensure you have the basics in place, such as Everplans and Principled Heart: “The number of end-of-life planning and document storage sites is on the rise,” she writes, many of which “have sprung from personal loss or out of necessity.”
In addition to offering guidance, many of these online resources allow you to upload your will, store passwords for social media and other digital accounts, upload photos, and share instructions for your funeral arrangements.
Review your estate plan every three to five years
It’s good practice to review – and adjust as needed – your estate plan every three to five years, DuFault says: “Pull the documents out and make sure that the provisions and distributions are still consistent with what you want to happen.”
Particularly if you have a kid, get married, or get divorced, you’ll want to review and update your plan.