Pop quiz...
What do Prince, Abe Lincoln, Martin Luther King Jr., Jimi Hendrix, Pablo Picasso, Howard Hughes, Bob Marley, Sonny Bono, Barry White, Stieg Larsson, James Brown, Steve McNair, and Michael Jackson all have in common?
Yes, as entertainers, political leaders, artists, and sports stars ... they were all well-known throughout the world.
But they have at least one OTHER thing in common...
None of them had a will.
That meant they had no control over what became of their assets when they died.
In some cases, their loved ones were left slugging it out in court for years over who should get what.
Lots of Americans could find themselves in the same boat. In fact, according to a Gallup survey, only 44% have a will.
You might not be as well-known as Jimi Hendrix or as rich as Howard Hughes.
But that doesn't mean you don't need a will.
Here's why...
If you die without a will, your home state determines what becomes of your assets.
For instance, here's what happens here in California...
Worse, if you don't have a family, the state will gladly put your assets into its coffers!
Moreover, without a will you don't have a say in who will be the executor of your estate - the person responsible for paying off any debts and dividing up your assets.
Do you have minor children? The question could then become who gets them!
You might assume that if you and your spouse both unexpectedly died, that your child's grandparents or another close relative would take them in.
But suppose others come out of the woodwork, claiming you wanted them to raise your children if you were no longer around?
Maybe a nice sum of money is involved - life insurance, retirement savings, etc.
The whole thing could end up in court very quickly.
A judge would have to pick who your kids go home with. Or the judge might decide that both parties are unfit and appoint a professional guardian.
There is absolutely no reason to risk any of this.
You can avoid leaving your family with messes like that with one simple piece of paper.
Within a will you can name who would care for your minor child if something happened to you. That person would be his or her guardian.
You could also choose who would handle the child's financial affairs - an asset manager or conservator.
It can be the same person as the guardian or someone different.
A court must approve your choices but would most likely honor your wishes.
And again, without a will, you have basically left the decision on who will assume responsibility for your child, as well as managing any money you left behind, to the court.
Just know that some things can trump a will...
The probate court supervises assets that are transferred according to your will. It also reviews creditors' claims against your estate.
But regardless of what is in your will, or even if you don't have one, at your death some of your assets transfer directly to the beneficiaries you had named in other places.
For example:
Property you've moved to a trustLife insurance proceedsAnnuitiesIRAs, 401(k)s, and other retirement accountsSecurities held in a transfer-on-death (TOD) accountOr property you own with someone else in joint tenancy or as community property with the right of survivorshipAll of that stuff would follow unique sets of rules. Just as an illustration, the IRAs would go to the beneficiaries you named when you set up the accounts.
So it's as simple as this...
Get with an attorney familiar with your state's laws to draft a will that follows your wishes on who:
Receives your assets after you dieBecomes the executor of your estateAnd takes care of any minor childrenObviously, you can also make like the famous people I named earlier and leave everything up to a judge.
But from where I sit, putting a will in place is a far better choice.
To a richer life,
Nilus Mattive
Editor, Rich Life Roadmap