By Bernadette Giacomazzo (Afrotech)
James Brown was a musical legend — but his failure to engage in estate planning prior to his passing away left his family in financial turmoil.
But needless to say, his will was contested almost immediately after his passing thanks to his complicated legacy. And, after a costly 15-year battle, his heirs finally sold the value of his estate for $90 million to Primary Wave Music.
This settlement, however, is not without its issues.
“For the past 15 years, several people — including five children of James Brown — have been battling it out in probate court to gain control of the estate,” AfroTech previously reported. “Before any money can be paid out, lawsuits must be decided and settled between current and former executors of the estate. It’s also unclear what will happen to the deal with Primary Wave should one or more of Brown’s heirs gain significant control of the estate, and how the pending lawsuits could negatively impact the estate’s value to Primary Wave.”
James Brown, however, isn’t the only celebrity that failed to do any estate planning. From Whitney Houston and Luther Vandross to Prince and Michael Jackson, celebrities have often failed to make proper provisions for their heirs when they pass away — and that leads to nothing but hurt feelings, protracted legal battles, and loss of valuable assets.
However, you don’t have to be a celebrity to engage in estate planning. No matter how big — or small — your estate is, making final preparations will go a long way in saving your family a lot of legal heartaches when you pass away.
Editorial note from Afrotech: The net worth listed in this piece is a speculative estimate drawn from a variety of online sources. Information provided in this piece is general advice meant to be informational in its nature and is not meant to be a substitute for qualified legal expertise. Contact a licensed attorney in your state to find option(s) that are best suited for your unique experience.
What Is Estate Planning?
No matter how small — or big — your estate is, you need to make final preparations. And that, according to Forbes, is the point of estate planning.
A true “estate plan,” however, involves more than just a will. Rather, it involves a series of legal documents that plan not only for your demise but for any financial responsibilities that may come as a result of your incapacity to make those decisions.
For example, if you suffer a stroke — or another debilitating illness that renders you incapable of making your own decisions — estate planning will ensure that your family members (or whoever else you may designate) will honor your wishes and “do right” by your finances.
Why Is It Important?
Aside from making sure your family honors your wishes, and avoiding family messiness like James Brown’s family, Investopedia reports that estate planning will ensure your heirs will avoid a hefty tax bill.
Estate taxes vary from state to state. For example, New York’s estate tax can go as high as 16 percent if the value of your estate is $10 million or more (Estate value includes both cash assets and real property, amongst other things). And this is to say nothing of the federal estate tax, which is five percent of the value of the total estate.
By preparing an appropriate estate plan, your heirs will be spared a gob-smacking tax bill.
And, as AfroTech previously reported, that’s something that Aretha Franklin’s heirs wish they had.
How Should Your Estate Be Set Up?
A basic estate plan has a very simple checklist, according to NerdWallet. Put simply, all you have to do is take inventory of your assets, account for what your family (or other heirs) need, and plan accordingly.
However, it goes without saying that the best type of estate planning is one that is undertaken with the aid of a professional and licensed attorney who specializes in estates, wills, and other planning directives.