Death and Taxes – Be a King, not a Prince

Death and taxes. Nothing else is certain. Every year, you have to pay your taxes. Every one of us is going to die. It’s a fact. You have to plan to pay your taxes and you really should plan to die.

“Nothing is certain except for death and taxes…” Do you know who this phrase is attributable to? Many say Ben Franklin. Other’s say Mark Twain or Daniel Defoe. The Yale Book of Quotes indicates that Christopher Bullock penned this phrase in The Cobler of Preston (1716). Regardless of who coined the phrase, in some sense it’s true, the only two certainties in life are death and taxes. Well, that and Christmas; we’ll get into that in a moment… Regardless of these certainties, people procrastinate and rarely prepare for the inevitable.

Taxes

My wife always says, “Christmas is Coming.” Translation, it’s never too early to start planning what you are going to buy as Christmas gifts for your loved ones. People procrastinate all the time. Every year, there are people who wait until the last minute to file their taxes. Every year on the local news, on April 15th (or whatever the filing date happens to be that year), they show people driving up to one of the handful of post offices that stays open until midnight so that the procrastinators can have their returns postmarked on time. Why do people wait until the last minute to file their taxes? I don’t get it. Christmas is coming. Okay, your tax returns aren’t Christmas presents, but every year, people wait until the last minute to file. Did you know that you can file an extension? If you don’t owe money, you can simply file an extension and buy yourself some extra time; no penalty. Granted, you’ll miss out on the fun of trying to get to the post office before midnight. A little known fact is that the deadline to file isn’t actually midnight, it’s midnight Pacific Time. So all you procrastinators back east who waited until midnight to file. You actually had three more hours. Pace yourself next year.

Death

While filing your taxes late could hurt you, failing to prepare for your own inevitable demise could really hurt those that you care about. As you likely already know, Prince Rogers Nelson — you probably just know him as Prince or maybe as “the artist formerly known as Prince” — died recently. Prince died without a will. No will? He didn’t have time? He didn’t have accountants and lawyers who could’ve / should’ve insisted that he have a will in place, even though he was just 57 years old. Granted, life expectancy charts likely projected that Prince had another 25 or so years left before he was to meet his inevitable demise. Unfortunately, for Prince and his fans, that wasn’t the case.

But the issue for Prince’s loved ones is much more significant and considerably more complicated. Without a will, no one can say with certainty what Prince would have wanted for his money. Would he want the money to go to friends? loved ones? family? Various charitable organizations? The city of Minneapolis? No one knows for sure. So what’s happening? Everyone and his brother starting coming out of the woodwork claiming to be entitled to a piece of Prince’s $300 million fortune. It appears that Prince’s alleged love child may actually be the sole beneficiary. Is this what Prince would have wanted for his money? Maybe, but perhaps unlikely. His friends, family, and loved ones will likely be arguing in courts about who is entitled to his fortune for some time. Is this what Prince would have wanted? Unlikely. Highly unlikely. I suspect that he would have rather had his money be divided up in some manner. Or perhaps not; maybe he did want all of his money to go to one person, but since he didn’t overtly, legally state where he wants his money to go, he has created a mess. A mess which could easily have been resolved, even with just the simplest of wills.

Where there’s a will…

There is no reason for you to procrastinate. Like it or not, your death is inevitable. It might not be today, it might not be tomorrow, but it is coming. Unfortunately, unlike Christmas and tax day, we don’t know the exact date when our inevitable demise will happen. Regardless, we can still plan for it, and it’s really, really easy. You can quickly and easily create a will. Here are a few ideas:

Use online resources

Resources like Willmaker, which costs about $55 and is available through Nolo.com and Amazon; it is a great option. Alternatively, you could give LegalZoom a try. There services start at just $69, and they allow you to create a will online. Both of these options will work for most of us, provided that your financial life is not too complicated or you aren’t looking to cut someone out of your will; for that you need a lawyer. If you go with Willmaker of LegalZoom, make sure to have it properly witnessed when you sign it.

Hire help

My mom is old. She’s very old. She’s long since passed her life expectancy. While she’s old, she still has all her faculties and remains sharp as a tack. For her 95th birthday last year, she decided it was time to get a will. Hey, everyone procrastinates… She was looking to cut someone out of her will (not me) so she needed to get a lawyer. She spent a few hundred bucks, but got everything taken care of. Better late than never!

You can hire an estate planning attorney, which usually starts at about $500. While writing your will, make sure to get three other documents to protect your family — a durable power of attorney for finances and healthcare in case someone has to make medical or financial decisions because you’re incapacitated, and a living will that tells a hospital what you want for life support.

My mom has her health care directive prominently displayed on her refrigerator. It’s kind of creepy, but it is practical and would be helpful if the EMTs need to get involved.

Review every three years

A good rule of thumb is to review the insurance and estate plan every three years to be sure nothing has changed.

Be a King…

It really is a shame that Prince did not have a will prepared. It will likely be quite a mess for his family. People provide all sorts of reasons for not having a will. They can’t stand think about dying. They can’t agree on who should take care of their children. Who should get their money. What charities to give to. It costs too much.

This is probably going to sound harsh: If you don’t have a will, you are being selfish and irresponsible.

All the reasons you tell yourself for not having a will drawn up are about you. But get over your misgivings and stop procrastinating. This isn’t just about you. You will die someday. If you have dependent children, somebody will have to take care of them. The money you think you’re saving by not getting a will — or at least shelling out a few dollars for a do-it-yourself kit — could be spent hiring lawyers to sort out the mess you would leave behind. That mess will cost considerably more than it would to professionally prepared will.

Without your own will, you are being fiscally irresponsible. You worked hard to get whatever you have, so protect it from folks who will waste your money. Protect the people that you love and cherish from those relatives that you aren’t keen on and you know will eventually cause trouble. By not creating a will, you are opening the door to fights, hard feelings, and misunderstandings. You are creating a potential mess. Is that the legacy you want to leave?

Your kingdom may not be worth anywhere near what Prince’s was, regardless don’t you want your heirs to receive exactly what you intended? Do the right thing. Don’t procrastinate, Christmas, tax day, and your demise will eventually arrive. Plan for the good times as well as the sorrow. Make a will now, don’t wait until tomorrow.

 

 

 

 

Photo credit: PeterTea

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