A Michigan jury ruled that a will found in Aretha Franklin’s couch is valid, hopefully ending a grueling five-year battle over her estate. Five years of bickering and legal fees probably isn’t what the legendary singer had envisioned for her family after her death. However, arguments—and more—are what could happen if you don’t have a proper estate plan in place.
While Franklin’s case may be a bit extreme, it still takes on average 400 hours over 16 months and $12,400 in fees to finalize an estate, according to a study commissioned by ClearEstate, an estate planning and settlement company. But this doesn’t have to be the case for your loved ones.
Consider these five estate planning tips to make your family r-e-s-p-e-c-t your wishes. Otherwise, settling your estate could hurt like hell.
1. Start with some basic tools
When creating an estate plan, you’re creating a toolbox, says Patrick Simasko, an elder law attorney and financial advisor at Simasko Law in Mount Clemens, Mich. “Aretha Franklin had one tool: a will she did on her own,” Simasko says. And while a will is a powerful estate planning tool, there are other simple tools you need to protect yourself and your loved ones—in life and death.
A will or trust
When they go to work: Upon your death (but living trusts, during your lifetime)
Why they’re powerful tools: Because you get to say what’s what
Often thought of as the cornerstone of any estate plan, a will or trust details who gets what and when they get it after your death. While thinking about death is no one’s favorite topic, skipping the process sets your loved ones up for a struggle akin to the Franklin family.
If your finances and assets are relatively straightforward, you might find that a basic will suits your needs. A trust could be a better tool if your finances are more complex—or if you live in a state with a probate process known to take a while. Luckily, we have two guides to help you learn more: everything you need to know about wills and a guide to trusts.
A living will
When it goes to work: During your lifetime
Why it’s a powerful tool: It’s a document that can relieve your loved ones’ stress
It’s time to talk about the worst, folks. If the unthinkable happens—say, a car accident or a heart attack—you’re unlikely to be able to make your own decisions about emergency care. A living will tells doctors and other medical professionals what you want done (or not done) to extend your life.
For example, you could want all the bells and whistles today—CPR, life support, and more. But your feelings might change later in life or if you’ve endured a prolonged illness. A living will prevents your loved ones from making these decisions at a stressful time.
A medical power of attorney (POA)
When it goes to work: During your lifetime
Why it’s a powerful tool: This doc appoints someone you trust to direct your medical care
Everyone has a family member where they’d rather go blind than put that person in charge of their healthcare decisions. So channel the late, great Etta James to make your family r-e-s-p-e-c-t your decision Aretha-style and appoint someone you trust to make your healthcare decisions if you cannot.
With a medical POA, you name someone who can make decisions about your medical care if you cannot. Many hospitals can help you with a basic medical POA if you’re admitted for care. You can also set one up in advance. Just ensure the person you appoint as POA knows they’re appointed and has a copy of the document.
A financial POA
When it goes to work: During your lifetime
Why it’s a powerful tool: This doc appoints someone you trust to manage your money
Aretha Franklin’s estate was worth more than $80 million. And while you might not have that much in the bank, your finances still deserve the attention of someone you trust. A financial POA names someone to handle money matters in case you cannot.
A financial POA can cover financial decisions big and small, such as just giving someone permission to pay your electric bill from your checking account if you’re incapacitated in the hospital or deployed overseas.
Guardianship orders
When they go to work: Upon your death
Why they’re powerful tools: It protects your children, which is beyond awesome
If you have children, imagining you won’t be there to see them grow up is the worst thought possible. That’s why parents and legal guardians with minor children need to establish guardianship orders. “As soon as you start a family, that’s a good time to make sure you have that paperwork in order, so someone will be there to watch over your minor children and take care of their finances,” Simasko says.
You can set up guardianship orders through your will or trust. In those documents, you can name a preferred legal guardian (possibly your child’s other parent or a family member) for your kids. You can also establish secondary guardians if something prevents your first choice from taking on the responsibility.
2. Make a list of your a-s-s-e-t-s (and liabilities)
Any well-planned estate will try to diminish the task required of the person you’ve named to carry out your wishes, says Davide Pisanu, co-founder and CEO of ClearEstate. Why? Most people who have acted as executors or trustees of a deceased loved one’s estate say the experience was one of the hardest ones of their lives.
To ease your executor’s (will) or trustee’s (trust) workload, take the time to make a list of your current assets, liabilities, and digital accounts. This list should include things like:
- Bank accounts. Include all checking and savings accounts, including banks and account numbers. If you have online banking access, include your username and password.
- Investment accounts. From brokerage accounts to retirement accounts like a Roth IRA or employer’s 401(k), write down the username, password, website, and, if necessary, the phone number for the company that holds the accounts.
- Outstanding loans. Your mortgage, auto loan, and any personal loans should make the list, including the contact information for each lender.
- Credit card accounts. Don’t forget to include major and store-based credit cards (like your Amazon card).
- Life insurance policies. Include the policy number, value, and contact information for the insurer.
- Online accounts. These can include streaming subscriptions, meal kit services, and more.
- Email accounts. List your email addresses and passwords.
If you’re worried about the security of having all this information on a sheet of paper in your desk drawer, consider using a digital vault. “In the past, people used security boxes at the bank or other mechanisms at home, but I’m of the view that a digital solution is more secure than these traditional solutions,” Pisanu says.
Digital vaults are also designed to grant the executor access upon death. In contrast, financial institutions may force your executor to jump through hoops to access a safety deposit box.
Tip 3: Name b-e-n-e-f-c-i-a-r-i-e-s on all your accounts
Even though the Aretha references might be wearing thin, naming your beneficiaries—and everywhere possible—is hugely important. Even if you forget to make a will (or lose it in a couch cushion), designating beneficiaries on some accounts means they can bypass probate—the legal process for validating a will—and have assets distributed straight to the people you’ve named.
In fact, beneficiary designations override a will. So even if your will says Johnny should get your IRA, if your IRA beneficiary is Tommy, Tommy gets it.
You can—and should—put beneficiaries on accounts like:
- Bank accounts
- Taxable brokerage accounts
- Individual Retirement Accounts (IRAs)
- 401(k)s and other employer-sponsored retirement accounts
You can also use joint registrations on certain assets and accounts through joint tenants with rights of survivorship (JTWROS). This registration type automatically transfers account ownership to the co-owner upon your death.
Alternatively, you can register the account as transfer on death (TOD), which means your share of the property will go to your named beneficiary when you die.
Assets that can be registered as either JTWROS or TOD include:
- Non-retirement bank accounts
- Non-retirement brokerage accounts
- Real estate, such as your house title
- Vehicles
Tip 4: Get help from an attorney (which doesn’t have to be expensive)
Thanks to the internet, you can DIY just about anything these days, but that doesn’t mean you should. Online estate planning sites have “fantastic documents,” but they’re only as good as the person… putting them together, Simasko says—and that person is you.
If you have questions about estate planning documents you create online or prefer an attorney to handle the entire process, there’s no shame in asking for help.
Many online estate planning sites offer a la carte consultations with an attorney. You can also contact an attorney specializing in estate planning (many are board-certified, depending on the state) or an elder law attorney.
Before engaging with an attorney, it can be helpful to read online reviews and check your state bar association’s website for any complaints or disciplinary actions against them.
Tip 5: Talk to me, talk to me
In all honesty, talking about death likely isn’t your number-one favorite thing to do. But starting the tough conversation with those you love can make things much easier when you’re gone. “One of the biggest issues around death is that we don’t talk about it,” says Pisanu.
There’s no one right way to explain to your loved ones what you’ve laid out in your estate planning documents. You could have a 36,000-foot-view conversation that just lays out the basics: the name of your executor or trustee, who will act as your powers of attorney, and any other details about who gets what that you want to share. You can also lay everything out in detail. You know your family and loved ones best and can choose the approach that you feel works best.
And if you want to check if your parents’ affairs are in order, Simasko says sharing that you’ve recently completed your estate plan could be a conversation starter.
“They’ll say everything is in order because back in 1984, they took you to Disneyland and got their will done,” he says but adds that a one-and-done approach might not be enough.
Just think of how things might’ve turned out differently if one of Aretha’s children had asked about her estate plan. Would the will have come out of the couch cushion and saved years of strife? Maybe. But everyone’s estate plan deserves a regular checkup—and a scheduled checkup for significant life events like buying a home, moving, marriage, divorce, and death.
The takeaway
Aretha Franklin deserves to be remembered for her music, not the perils of an estate planning misstep. Her legacy will live on in her songs, and these estate planning tips can make sure your legacy—no matter its size—does the same with those you love.
