Don’t Make the Same Mistake these Legends Made
By Bryan Miranda
Aretha Franklin, Michael Jackson, Prince, Bob Marley, James Brown, Kurt Cobain and Jimi Hendrix are some of the most influential musicians of the last half century. With Aretha’s passing a couple weeks ago, it highlights another thing all these entertainers had in common: they died without having a will in place.
It seems so odd to hear that people such as the ones mentioned above, with all their financial planners, attorneys, business managers could let such a simple item fall by the wayside. Having a proper estate plan in order helps alleviate the financial stress mourning family members face during an obviously emotional time. Families often tear themselves apart over years of argument in courts all because nothing was in place.
Let’s discuss the difference between a will and a living trust. A will is a written document, both signed and witnessed, indicating how your assets are to be disbursed once you pass away. It can be updated throughout the course of your life. However, a will written within the state of California will still have to go through the court process known as probate (we’ll get to that part later). A living trust is a document that is created, usually by an estate attorney, that can make decisions on your behalf beyond the grave. It also can be amended over time to include more assets you accumulate. A will is good. A living trust is great.
The state of California allows heirs making a claim on a deceased loved one’s assets to bypass probate if a living trust was created. It’s a very tidy and efficient process. For those that died without a living trust, even if a will was written, you’ll enter probate. I’ll highlight the 3 main reasons probate isn’t where you’ll ever want to find yourself in.
• Probate is Costly
o The average cost of probate in the state of California is estimated to be between 5-8% of the overall value of your gross estate. These fees pay for the attorneys, judges, and anybody else involved in the process to review and settle an estate. These fees are secondary to any estate or income taxes due.
• Probate is Lengthy
o In California, the time it takes probate to close on an estate is between 7-12 months but can take longer depending on the size of the estate and can delayed by peculiarities involved.
• Probate is Public
o Since probate is handled in public courts, all the details become public record. Amounts of distributions and types of assets transferred to beneficiaries can all be found very easily. Additionally, while the estate is being reviewed, anybody can put in a claim that the deceased promised them something. As ridiculous or not as the claim may be, it still must be reviewed by the judge, thereby lengthening the process some more. If you don’t believe me, I’d encourage you to google Marilyn Monroe and the 40 years it took probate court to settle her estate.
Do not make the same mistakes some of these musical legends made. Get a proper estate plan in order. Reach out to your financial advisor. Reach out to an estate attorney. There are many different rules, many more than I’ve laid out in this article, that need to be taken into consideration. Do whatever is necessary to make what is an otherwise awful situation a little bit easier on your loved ones. And for those of you that may be on the younger side reading this, reach out to your parents or grandparents and ask some of these tough questions. Their mess can quickly become your mess and could have all been avoided by planning ahead.
Gerber Kawasaki Wealth & Investment Management and LPL Financial do not provide legal advice or services. Please consult your legal advisor regarding your specific situation.
Securities offered through LPL Financial, Member FINRA(http://www.finra.org/)/SIPC (https://www.sipc.org/).
Investment advice offered through Gerber Kawasaki Inc, a registered investment advisor. Gerber Kawasaki and Gerber Kawasaki Wealth and Investment Management are separate entities from LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.
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