Almost all would agree that 2020 was a year like no other. The lockdowns and the relentless barrage of news about COVID-19, the death rate, and problems with health care made even the most optimistic pause to consider their own mortality. Estate planners reported that an escalating number of new clients and clients they had not heard from in years were calling to update their estate plans. Estate planning is critical for everyone, from the mega-rich to those who live within more modest means. Estate planning can help ensure that the financial rewards you have worked hard all your life to earn are passed on in the way you intended. But this is not your only concern. You also want to ensure your estate planning focuses on keeping your financial affairs private!
Chadwick Boseman and Eddie Van Halen: Lessons in Estate Planning
The well-publicized deaths of celebrities such as Chadwick Boseman and Eddie Van Halen have led many people to consider how they can keep their financial affairs private. Chadwick Boseman died at the age of forty-three from colon cancer. A public figure, he played the heroic Black Panther in the Marvel Comics Avenger and other roles depicting the lives of Jackie Robinson, James Brown, and Thurgood Marshall. Chadwick Boseman’s actions suggested that he was an intensely private man who valued his ability to keep his personal and professional lives separate. The tragedy of Boseman’s premature death was compounded by the fact that he did not have a will. This fact was publicized when his widow, Taylor Simone Ledward, filed to open probate on behalf of his estate with an estimated value of $838,500 in a Los Angeles probate court. She also asked to be named the administrator of his estate.
According to some sources, Boseman’s estate is estimated to be valued in the millions. The discrepancy between the estate value going to probate and the estimated value of the entire estate suggests that the bulk of Boseman’s assets are held in trusts. Since the value of private trusts is not public knowledge, any guesses on these assets’ value and distribution are just speculation. Estate planning by establishing living trusts keeps financial information confidential and allows each individual’s lawyers to handle their affairs privately.
Eddie Van Halen died in October 2020 at the age of sixty-five, after a long battle with throat cancer. Van Halen was widely regarded as a rock-and-roll legend. He was also the founder, a songwriter, and lead guitarist for the rock band, Van Halen. Van Halen’s net worth was estimated at around $100 million. Van Halen married twice. In 1981 he married his first wife, Valerie Bertinelli, and in 2012, he married his second wife, Janie Liszewski. Eddie and Valerie had one son, Wolfgang.
Estate planning can be more complicated with divorce, children, and remarriage. Estate planning for Eddie Van Halen may have included such factors as alimony for Valerie Bertinelli, the terms of the divorce, how the estate will be divided between Wolfgang and Janie Liszewski, and the fact that Wolfgang, besides being Eddie’s son, was also his employee.
What is probate?
When someone dies with or without a Will (as probate will occur with both of these two scenarios) and probate is opened, a court of law determines how a person’s property and possessions will be distributed. The details of which are open to the public. Probate is dividing and distributing someone’s property and money following the state’s intestacy laws in which probate was filed. The process of probate can feel very public and intrusive. There are also costs associated with the probate process. The probate process with a will at least ensures that the property and assets are distributed to the people and organizations designated in the Will, however, there’s still the need to go through the arduous probate process.
What is a living trust?
Another option, especially for people who value privacy and control, is to place their assets in a living trust. A trust is defined as a legal planning tool used to manage one person’s money for the benefit of a third party. The process post-death is managed privately, with or without the use of estate lawyers (most choose to use an attorney, but that’s up to your successor) instead of in a public court setting. Estate planning is not just for the wealthy. Anyone can set up a living trust. A living trust protects your privacy, but it has additional benefits. Trusts allow individuals to detail specific guidelines and restrictions for the trust assets to ensure that hard-earned money and cherished possessions are protected from potential creditors and financial predators—this can be planned for both during your life and to go into effect upon your death.
No one likes to think about a time in which they will not be there to take care of the needs of their loved ones personally. Proper estate planning can make things easier for your loved ones when you pass and give you peace of mind now.