2023 EP0610 | Financial Updates | What Happens if You Die without a Will?

We want you to plan for success. Welcome to Planning Matters Radio.

Peter, good to see you. Today we're going to break down what happens if you die without a will. Despite potentially devastating consequences, 54% of Americans don't have a will, leaving estate planning then up to a complicated range of state laws.

So let's just start with the top. Who even needs a will? Because I think a lot of us assume it's for the very wealthy, but that being said, one in five Americans with even a million dollars or more doesn't have a will. Yeah. And you get to that kind of wealth level and maybe you'd be surprised by that.

I am not because I've seen it so frequently. The wealth level doesn't seem to deter the Superman invincibility syndrome that I'm not going to pass away. But guess what?

There's 100% chance and we don't know when. And so any mature, responsible adult over the age of 18, you need your will and not just your will, but your legal documents, because the will tells the court who gets your stuff after the probate process, which, by the way, is equivalent to a lawsuit that you place on your family after your death on behalf of your creditors. But the other legal documents, the medical directive, the power of healthcare, power of attorney, actually tells who can make decisions on your behalf if you are unable to do so. And that may be just as important. In fact, in my own family, that was very important. And we were not able to make decisions for a close family member, even though we should have been able to.

And he passed. So I mean, you've got to have these legal documents in place, ladies and gentlemen, no matter where you're at. You can make those decisions on your behalf, even if you have no worldly possessions. But the other thing is, that the married ones may get nothing, especially if they are unmarried partners or stepchildren who are left out under the law in almost every scenario.

Yeah. And you mentioned state specific. Well, North Carolina is a pretty interesting state where I am at. And every state's a little different. But North Carolina not only does not have common law marriage, regardless of how long you may have lived with a partner, but we are actually an anti-cohabitation state. And I think we're one of like four or five states that does not even allow technically on the books by law for you to cohabitate under the same roof with a unmarried partner. And there was sometime within the last 10 years or so a teacher that was fired because, and there's probably some other reasons and more to the story, but by the book, she was fired because she was cohabitating with an unmarried spouse. And so you may expect that possessions and assets and even the roof over a spouse's head would or a partner's head would pass to them if you passed away. But that may or may not be the case, especially with unmarried partners. So know your state's laws and understand that you need to, if you've got wishes and desires to transfer those assets or even the home itself and possessions to an unmarried partner, to stepchildren, that you need to document that specifically in the legal documents in order to have that accomplished.

So now we're going to move on to some tips and you just said it, Peter. Number one, know your state's laws. Yeah, know your state's laws and work with an attorney or work with someone within the state that would know. I mean, there there may be services. There may be I've seen prepaid legal services.

I've seen downloadable documents. Make sure that that is state specific and I'm the financial side of the planning arrangement. Right. I help my clients to identify financial opportunities and investment management. But you're never getting the most out of your team from a financial, a legal, a tax professional. If each professional isn't in their focus, doing their full time job as well as coordinating those efforts. So I know where these specific documents are needed and valuable. But you really need to work with an attorney licensed within your state and someone who focuses on this area, someone who's doing divorces on on Monday and traffic law on Tuesday, maybe a criminal charge on Wednesday.

You you want somebody who focuses in on the estate planning, who can do a good job of that for you. Absolutely. All right. The second tip here is make sure all your assets are covered. I think a lot of us, again, assume here, hey, my retirement account has a beneficiary listed, but that's not everything, obviously.

Right. Well, life insurance, you would hope you've named beneficiaries and updated them. By the way, if life circumstances have ever changed, as well as beneficiaries on retirement accounts, those should be listed and named and updated regularly. But the possessions, the bank assets, a lot of times don't have beneficiaries listed or even a place to list them.

That is a specific form. Brokerage accounts as well. You have to request a POD or a TOD form that is payable on death or transferable on death form. And if you go into your bank or talk with with your broker advisor, if you've got non qualified accounts, they'll know exactly what you're talking about.

It's a very easy process to put those on. But property, the home, vacation homes, automobiles and then the rest of your possessions. Right. If you've got a daughter who was very, very in love with a specific item. You know, she she really loved that teapot.

I want her to get it specifically. You've got to name that specifically or you might risk that that daughter who loved that item not getting that item or family even fighting over it. And I've seen families with children, six or seven children fighting over a twenty thousand dollar home till the lawyer bills racked up to be three or four times what the home was worth. So nothing can create infighting and disagreements within family like. Undone legal planning and and it's also an efficiency standpoint, I mean, you want things to move efficiently because there are plenty of stories of celebrities whose estates have been in question for decades. Lawyers are playing ping pong back and forth with the bill and just draining the estate value down.

You don't want anything like that done with your estate. It was Doris Duke. Right. And Elvis Presley and Whitney Houston. And I mean, the list goes on and on.

I used to have a few different posters of celebrity estate planning mistakes. And I mean, the list is almost endless. All right. The third point here. Don't delay. I think it's so easy to delay because this can bring up a lot of complex family dynamics. Yeah.

And updated on a regular basis as well. But don't delay. Everybody's got, again, that invincibility complex. We're all Superman or Superwoman. And this is never going to be a question.

It is. There is 100 percent chance that at some point in time you will pass away. And there's actually a pretty high instance of needing someone else to step in and make decisions even before that time.

And it can happen unexpectedly. So make sure that you are not just putting this off. Laws, by the way, on estate tax levels are likely to change as well as income taxes in 2026. And that estate tax level is going to come from from a very high point where it is currently down significantly. You can take advantage of today's laws if that's something that's going to apply to you. And if you do have a net worth of a million dollars or more today, then likely that's going to grow. And you may encounter estate taxes into the future that you could avoid by planning proactively today.

And so we really want to just get things done. Hey, if you're traveling right, if you're going into a different state or a different country, make sure you've got your legal documents in place. That's another thing that can be surprising to folks and can get caught off guard if you have not specifically done and addressed that legal planning. Mm hmm.

You hit it on the head. Proactive planning. So important.

Such a great thing to leave your family as opposed to the infighting. Peter, if somebody wants help with any of these documents, what's the best way to reach you? Yeah. Reach out. Be in touch. Again, we've got a network of attorneys that we have worked with or through know when and where these things are important and where it's not our specific area can point people in the direction of resources. We we have those relationships established and at our fingertips. So give us a call.

Nine one nine three hundred five eight eight six nine one nine three hundred fifty eight eighty six. Or you can visit online at Rashan planning dot com. It looks like rich on planning dot com. All right, Peter, thank you very much. Always a pleasure.

And thank you. Important topic. This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to seek investment tax or legal advice from an independent professional advisor. Any investments and or investment strategies mentioned involve risk, including the possible loss of principal advisory services offered through Brooke's own capital management. A registered investment advisor, fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission, which may result in a conflict of interest regarding compensation.