Why is estate planning so important?

The death of Prince might have raised this question for many Nevada residents. The music legend died without having done any estate planning, and now it will be up to his home state to determine what happens to his millions and his music. In addition, the IRS could end up being one of the biggest heirs of his estate.

More than likely, Prince did not intend for this to happen, but it is too late now for it to be changed. The same could be true for any Nevada residents who pass away without a will. State laws generally take care of spouses and blood relatives. However, if an individual had any intention for friends, charities or unmarried partners to receive a portion of the estate, those wishes will not be considered by the state.

Not only will the state determine where a person’s assets end up, but also who will administer the estate. If there are minor children involved, the state will also determine what happens to them. In many cases, these decisions would not be the same ones that would have been made by the individual. For these reasons alone, an estate plan is crucial. For those with substantial net worth upon death, taxes are also a major consideration.

Few people would be happy with the courts deciding what will happen to their assets and their loved ones after death. Therefore, it would be a good idea to engage in estate planning as soon as possible since no one knows when he or she will die. Prince was only 57-years-old when he died, and he might have believed — as many people do — that he had time to make these decisions.

Source: CNN Money, “Here’s what happens when you die without a will“, Jeanne Sahadi, April 28, 2016