While thousands mourned the death of pop legend Prince, the most surprising thing for financial buffs was to hear that he had died without a legal will. Fast forward to today and famous and wealthy baseball player Jose Fernandez has just died. As unfortunate as it is, we have to ask what could happen to Jose Fernandez’s assets if he does not have a will. While many people take care of their legal issues such as their taxes, their mortgage, alimony payments among others, one of the most neglected is the execution of a will. While we would like to think that lessons have been learned from Prince dying intestate, this is not entirely accurate. With the death of Jose Fernandez, here are five things that could happen to his assets if he never executed a will:
He Would be Declared Intestate
According to Grace Lou, a California-based attorney specializing in Trust and Probate law, a person is deemed to have died intestate if at the time of their death they do not have a valid trust or will in place. If Fernandez died intestate, a judge would have to appoint a trustee who will distribute all his assets according to the complex laws governing intestate succession.
The Public Would Have Access to Information on His Estate
Dying intestate means anyone has access to information on how much your estate is worth. For celebrities such as Jose Fernandez, this is undesirable given that the family would want to ensure the tabloid media does not get hold of such information. If Fernandez has a written will in place, there will be clear instructions on how his holdings will be allocated. Nonetheless, even if he has a will, his estate may have to undergo probate to ensure the instructions are carried out in an appropriate manner. If he has a living trust, there is no need for the probate court process, as the trust will govern all allocation of his holdings.
His Family Will Incur Extra Costs
If Jose Fernandez died intestate, his family would have to pay an executor and hire a lawyer to handle the legal aspects of succession. While he is worth quite a significant sum, the fees may begin to add up particularly if the probate process becomes lengthy and complex. It would be better if he has a trust, as it is relatively less chaotic and provides for a seamless succession plan. If Fernandez is intestate, the settlement of who gets what can take many years and turn chaotic meaning that the family will have to spend more on legal processes such as arbitration. An additional complication for such a celebrity may include his vast collection of intellectual property including image rights, endorsements, and other holdings.
His Assets Will Not be Automatically Allocated According to His Wishes
While he may want his family to be well provided for when he passes on, dying intestate means he does not have a say in how his assets are divided up. If Fernandez died intestate, his property, wealth and other holdings would be divided up according to the rules set out in succession law. Since Jose Fernandez does not have a surviving spouse, the rights to the estate may go to his unborn child, followed by his parents, and lastly his brothers and sisters.
What If He Has a Will?
If Jose Fernandez has a will, his estate avoids the complications and pitfalls of having the courts decide on who gets what of his estate. By having a will or a trust in place, his estate can eliminate or reduce the costs associated with succession processes such as income, inheritance, and estate taxes. This would save the family and the beneficiaries of his estate a lot of money. If he has a living trust, his estate will not have to undergo the probate court procedure and his financial information, including its distribution will remain private. On the other hand, if he has a will, then his financial information will be a matter of public record.
Fernandez’s sudden death needs to serve as a warning to all of us to set our affairs in order while we still have time. By clearly setting out what you need to be done with your estate, you are giving your family control over your estate. In fact, by clearly setting out your wishes in a will or having a living trust you prevent scavengers such as undisclosed children, mistresses, and former business partners from laying a claim to the estate after your death. As Jose Fernandez’s passing shows, death can happen at any time, leaving your family mired in complicated and expensive legal wrangles for years. Do not be like the many who put off writing a will to an uncertain future date or significant event such as buying their first house or having a child. Having a financial advisor help you prepare for your family’s future is one of the best things you could ever do for yourself and your loved ones
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