by Michael Kling | May 15, 2019
If you have read our articles before, you know we believe in what we do. Although you might see it as a bit boring, helping people plan what happens to their estates is incredibly rewarding. In our view, planning and making decisions about your future will give you peace of mind – we call it the “peace of mind you deserve.”
What happens if you don’t plan? The short answer is that your state of residency has a plan for you. Every state has “intestate succession” laws that dictate what happens to your property if you die without a will or trust. As much as we all trust our politicians, wouldn’t you rather decide how your assets, belongings, and business interests are passed on when you die?
There are some surprising examples of a lack of planning by wealthy celebrities. Consider Aretha Franklin, who died without a will or trust. Her $80 million estate is being administered under Michigan’s intestate succession laws. She failed to plan for the smooth and orderly transition of her business interests, including substantial intellectual property rights. Her ex-husband is now reportedly making a claim to royalties that her four children would otherwise inherit. Further complicating matters is the fact that one of Ms. Franklin’s children is disabled and may be unable to independently manage the business or financial matters.
Similarly, the roughly $300 million empire Prince left when he died suddenly at age 57 is being administered according to Minnesota’s intestate succession laws. Heirs are fighting over business interests, intellectual property rights, and ownership of material found in Prince’s vaults. The fight over music rights could have been avoided with proper estate planning. Instead, family members continue to litigate their claims and it is unclear whether anyone will come out a “winner.”
As a business owner, your estate plan should be more than a simple will. You need to create a plan for what happens in your business if something happens to you. This includes considering disability insurance, life insurance, and creating a succession plan for your business. Making these decisions while you are competent and active in your business means you can plan for your business to survive and to thrive well beyond your lifetime.
It is crucial that you consult a qualified attorney to discuss your wishes and options. You must also follow through with having your documents prepared and properly executed. Failing to do so means Nevada’s intestate succession laws will determine how your business will be divided up upon your passing. To avoid having the “State of Nevada estate plan” apply to your business, you should consider having a will and a trust, health care directives, financial powers of attorney, confirming your beneficiary designations, and formalizing your business succession plan.
Your business is an important asset that should be carefully incorporated into your estate plan. At Kling Law Offices, we enjoy helping our clients create estate plans that will preserve businesses in a manner that generates both confidence and peace of mind for the future.