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The Importance of Wills and Trusts After Death

When Aretha Franklin died last week at age 76 from advanced pancreatic cancer, she didn’t have a will or a trust to her name.

Now, the soul legend’s four adult sons will be going to court publicly to settle the estate. Since Aretha was an unmarried person who did not have a will to her name, her assets will be divided equally among her children, according to Michigan law.

Franklin’s niece has asked the court to appoint her as a personal representative of the estate, which may complicate the case.

“Aretha is going to have her estate plan planned for her by the state as opposed to by her,” Lowell Schoenfeld said, who is a Florida trust and estate attorney at Green Schoenfeld & Kyle in Fort Myers.

So what lessons can you learn from this?

First off, in the case of Aretha, the lack of a will means her finances will become public in Oakland County Probate Court. Her family members, instead of rejoicing on her achievements in her professional and personal life, may develop a contentious relationship as they battle in court.

Death is unpredictable. Some die from old age, but the reality is that most of the deaths in the world happen for different reasons.

Nearly 650,000 people a year will die from heart disease, which is the number one cause of death in the United States in 2015. Cancer is the second leading cause of death, with less than 600,000 persons dying per year, according to the Center for Disease Control .

“We never know when we are going to pass away,” Schoenfeld said, “so we like to think about it as soon as possible.”

After having kids, parents should take their future into account, such as how will they afford living expenses following an unforeseen death. Reviewing a will after significant life events is also important, too.

These life events often include births, deaths in the family, complicated medical problems and divorces in the family. A good rule of thumb is if an event increases or decreases a person’s net worth, then it is a good time to review the will.

“So you want to review not only what your assets are,” he said, “but who they’re going to.”

It is important to have this settled. For instance, if a parent were to die, the will should clarify who will receive the proceeds from the sale of a home or apartment and how to distribute it.

“If you don’t have a will, your children will receive your assets when they are 18,” Schoenfeld said. “Most 18-year-olds are not equipped to handle inheritances.”

Bottom line — plan what happens with your money before you die.

“When you do a will, it’s not helping you at all,” Schoenfeld said. “It’s helping you have a peace of mind. It’s designed to protect the next generation.”

Reporting by Brittany Muller and Michael Adam Mora