Lessons from Celebrities: Why You Need a Will

As I said last year when Heath Ledger died, my first thoughts always go to the children of the deceased. I worry that stars with young children haven’t prepared for the possibility. In Heath’s case, he hadn’t updated his will to include his daughter. Now we have the even more challenging situation of Michael Jackson’s death. According to court filings, Michael Jackson died without a will. No matter how famous or unfamous you are, take this as a lesson that you need a will, especially if you have children. Even better, get a trust.

Why You Need a Will

In the average Joe’s case, a will states the people you would like to inherit your estate. In most cases, surviving children or spouses will automatically inherit without a will, but it’s ultimately up to the state to decide. Do you trust the government to divide your estate for you?

What Happens if You Die Without a Will

In Michael Jackson’s case, his intestate death will result in years of legal wrangling and thousands of dollars in legal fees. Like Elvis, he is probably worth more dead than alive. (It sounds callous, but it’s true. His estate will continue to earn royalties for decades after his passing.) If he had a will or trust, he could have named someone to oversee his business following his death. Now the court will determine who has that right. Most likely, his children will inherit everything, but they are minors and will therefore need someone to manage his affairs until they are adults.

In addition, a will would have allowed him to name his children’s legal guardian. Some reports said he wanted them raised by his nanny. Other reports indicated that the birth mother of two of the children may make a claim. The courts have so far granted custody of all three children to Jackson’s mother, but that could change. If multiply custody claims are filed, this issue could drag on for quite some time.

A Trust is Better than a Will

Given the size of his estate, Jackson would have been better served with a trust. A will must still pass through probate court, which can be expensive and slow. A trust typically avoids the courts while also ensuring that the children’s rights are protected and their financial support arranged from day one.

But I’m Not Famous, You Argue

Some people argue that they don’t have assets, therefore they don’t need a will. If you’re childless and living in your car, that’s probably true. However, if you have children, you need a will or a trust, regardless of net worth. It’s the only way to ensure that your wishes are carried out, rather than the wishes of the state. If you have any assets, even a falling down shack, consider a trust to reduce the tax impact and transfer time of the assets. When minors inherit a trust, the trust maintains ownership and the designated trustee is responsible for managing and distributing the assets. That won’t happen in Jackson’s case.

Many people worry about the expense of creating a will or a trust. If your estate is complicated, you should see a lawyer. If it’s fairly uncomplicated, you can use a legal service site like LegalZoom.com to prepare your documents quickly and affordably. Worst case, handwrite your will on a piece of paper, sign it, and put it in a safe place. These aren’t legal in some states, but it’s something at least. A formal will or trust is always best.

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