What Prince Taught Us About Estate Planning
The music icon worked so hard during his life to protect his privacy, and now the details of his assets, and more importantly the possibility that he did not create a plan for them after his passing, have cast his financial life into a spotlight that he tried so desperately to avoid.
“I think Prince simply thought he had time,“ says Lori Anne Douglass, an estate-planning attorney at Moses & Singer in New York.
“For someone who worked so hard to be private and maintain control of his own music, it doesn’t make sense that he gave up his power in this way. The most important thing we learned from Prince is that you simply never know when you’re going to die,” she adds.
Douglass points out that while so much discussion centered around the fact that Prince didn’t have a will, a trust would have allowed him to protect his privacy. That information is private, whereas the content of wills is public.
The fact is, Prince, like the rest of us, was human. We are not wired to focus on estate planning. According to Legalzoom.com, nearly 70% of blacks in the United States die without a will.
When you consider, however, that a significant portion of wealth is passed through generations, you begin to understand the significance of creating a plan for your assets when you move on, and some of the challenges our community has had when it comes to building wealth.
For many of us, the hardest part of estate planning is figuring out how to begin. Douglass says the first step is to think about what happens as people die, and to consider the fact that we are all living longer, and likely to become incapacitated in some way at some point in our lives.
“The first step is getting your disability documents in order through a healthcare proxy and power of attorney. You can get statutory forms on your state’s website,” says Douglass.
The person you appoint to make healthcare decisions is called ‘the agent.’ You are ‘the principal.’ Unless you limit your agent’s authority, in most cases, they have the power to make any medical decisions you would make on your behalf.
“When beginning your estate planning, it’s also important to make sure that you have the correct beneficiary designations on things like employer benefits—401 (k)’s and insurance,” says Douglass.
In addition, when you start the estate planning process, you should consult an attorney so that you understand how the different aspects of your plan should come together. Douglass suggests seeking out a free consultation, which can at least result in guidance and affordable recommendations.
Once you cover those basic areas, it’s important to get wills and trusts in place. We’ll examine determining which is right for you in Part 2 of this series.