Making Cents: When your own success is an impediment
By: John P. Napolitano, CFP®, CPA, PFS, MST
The day the Queen of Soul died, I jokingly asked “I wonder what type of mess she left for her heirs”. At the time, the comment was truly in jest, but sure enough just like many before her, it appears that Aretha Franklin died without a will. Why would someone do that is the big question?
Drawing on my professional career experiences, people with more money and stuff than they need commonly have messed up estates. These lucky or hard working families feel that they can do whatever they want, whenever they want, without concern of cost or running out of money. What they fail to recognize in their very satisfied world is that they will eventually run out of time, and someone will eventually have to do all the work that they ignored. As someone who works directly with families with complex situations and are subject to death taxes, there are many parts to this headline that irk me.
The first is that her death sans will appears to be the focus. In a properly planned estate, the will is often the least meaningful document unless there are minor children who may need a guardian until age 18. It is possible that Aretha had a trust based plan, but that also is unlikely if she died without a will.
The second bothersome part is that a poorly planned estate, especially a large one, brings out the worst in people. It can bring out the worst in your family, friends, attorneys, current or former business partners and anyone who feels that they should make a claim (real or frivolous), against your estate. In effect, without written guidance, your home state’s rules of intestacy will guide how the division of the assets goes. This may include estranged family or almost anyone who decides to file a claim.
What this all boils down to is time and money. You may recall from Michael Jackson’s passing, that these estates cost millions and take years, even decades to settle. Ultimately blame falls on the decedent, but I also wonder why the professionals in their lives couldn’t have been a little more influential and help get things in order.
This leads to those of you who feel that your estate may be all set, but down deep know that there may be some loose ends. The answer may be in your current estate documents. If you hired a lawyer to set up a will, and perhaps a trust but you aren’t using the trusts during your lifetime, you should ask why. It may be an oversight, or perhaps your attorney hopes to take your estate through the probate process in order to fund the trusts. This too takes time and money, with the no benefit to the heirs along with substantial legal fees to close the incomplete plan.
This information is not intended to be a substitute for individualized legal advice.
John Napolitano, US Financial Advisors, US Wealth Management and LPL Financial do not provide legal advice or services. Please consult your legal advisor regarding your specific situation.
John P. Napolitano CFP®, CPA is CEO of U. S. Wealth Management in Braintree, MA. Visit JohnPNapolitano on LinkedIn or uswealthnapolitano.com. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. John Napolitano is a registered principal with and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through US Financial Advisors, a Registered Investment Advisor. US Financial Advisors and US Wealth Management are separate entities from LPL Financial. He can be reached at 781-849-9200.