Most would agree that the recent death of 27-year-old singer Amy Winehouse was tragic. Winehouse continually battled drug and alcohol addiction as her music made millions -- including a song called "Rehab."
But she got her will right MSN Money reports. It leads a New York Estate Planning Lawyer to believe this is a perfect example of why people of any age must consider putting together a will. These types of plans do not just apply to people who are older, but people of any age, regardless of financial status. In order to make sure your assets go to the people you want, a New York will must be prepared.
According to the article, Winehouse's revised will reportedly prevents any of her fortune -- about $16 million -- from going to her ex-husband. Instead, the money will go to her father, mother and older brother.
Under English law, a divorce doesn't undo the presumption that the natural inheritor is the spouse. Without a will, in England, divorcees would inherit assets. However, in New York, Estates, Powers and Trusts Law section 5-1.2 disqualifies a spouse from inheriting if the parties were divorced. Under New York intestate laws, a person's spouse and children typically inherit assets. Thus, people who may have a poor relationship with the decedent may benefit, while others who were close to the person may receive nothing. It's best not to leave these issues up to the state. Setting up a clearly laid out will can avoid any confusion and can make sure the person's desires are carried out after death.
Preparing a New York estate plan involves many considerations particularly in the case of a divorce. While the New York statutes and a valid Last Will may exclude a divorced spouse, other assets that have designated beneficiaries should also be reviewed and revised. These include retirement funds and jointly owned interests. An example of the problems caused by incomplete planning were displayed recently in the case of an attorney who divorced his wife and had named her as the beneficiary of his Individual Retirement Account during their marriage. As reported in insurancenewsnet.com on August 2, 2011, following the divorce the attorney never removed his ex-wife's name as the beneficiary of his IRA. Ultimately, the account was paid to the ex-wife. Adding insult to injury, the IRA contained proceeds from another retirement account that was rolled over into it.
According to an AARP poll, more than one third of Americans over 50 lack a will, living trust or power of attorney. Most people consider death a long, down-the-road event. But as we see every day, death can happen at any time. It is critical to put plans in place to make sure finances are in order after death.
MSN calls parents of minor children "negligent" if they don't have these documents in place. While people don't want to plan their own demise, setting up a will saves the children from a potentially ugly child custody battle as well as providing guidance concerning the manner in which the children are to be taken care of after the parent's death.
While do-it-yourself estate planning web sites exist, the MSN article points out that they include outdated information, lack of customization and too little flexibility. They also leave out certain topics, such as creating a special needs trust.
The bottom line is that estate planning requires some effort, but people lack motivation to accomplish this simple step in their lives, thinking they won't need to do it for a while. We are a nation of procrastinators in this regard. But you can save your family members a lot of stress and frustration by establishing a will or trust now, before it's too late.