Vol 317: IN THIS ISSUE
 
A Lesson from Prince...


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Why You Need an Estate Plan:
The Lesson of Prince’s Death

Before his untimely death last year at the age of 57, Prince Rogers Nelson, better known as "Prince," enjoyed a musical career that spanned nearly four decades. In addition to being a prolific songwriter, multi-instrumentalist and record producer for other artists, he changed his name to an unpronounceable symbol and then back again, broke with a major record label and took his songs off of popular streaming services.

While Prince’s career choices made it clear that no one could tell him what to do while he was alive, this will not be the case in death.

Apparently, Prince did not have a will; therefore, Minnesota’s laws of intestacy will decide what happens to his estate. Similar to New Hampshire, the laws of Minnesota direct that Prince’s assets would go to his siblings, as it appears that he did not leave a spouse or children. Since Prince died without an estate plan, we don’t know if this was his wish. Prince’s significant estate, which includes personal property, real estate, bank and investment accounts, royalties and unpublished music, is likely to be subject to a lengthy Probate, as well as a significant estate tax controversy.

What is Probate?
"Probate" is the court process that determines how a deceased person’s assets will ultimately be distributed. How long it ultimately takes will depend on a myriad of factors, which may include the size of the estate and nature of assets, as well as the beneficiaries and whether they get along.

Why You Need an Estate Plan
This situation highlights the importance of drafting and updating estate planning documents. In addition to a will, which amongst other things, dictates how your Probate assets are to be handled, trusts and beneficiary designations can ensure that assets pass to your beneficiaries outside of Probate process. While this may seem straightforward, crafting an estate plan that addresses your personal situation is a very complex endeavor. For this reason, consulting with an estate planning attorney is very important.


Financial Powers of Attorney: What’s New?

A financial power of attorney, also known as a durable power of attorney, permits someone you, the “principal”, designate (called your agent) to oversee your finances. Typically, this document is used so that your agent can step in and pay your bills or handle other financial matters when you cannot physically or mentally handle them.

A financial power of attorney is effective when signed by the principal and accepted by the agent. While most are designed to be immediately effective, the principal has the option to having their financial power of attorney only go into effect when a physician declares them to be incapacitated. This is called a “springing” power.

What’s new?
On January 1, 2018, the Uniform Power of Attorney Act, RSA 564-E, will go into effect. This new law provides for the following:

  • A form document, called a “Statutory Form Power of Attorney” may be used to create a financial power of attorney, although this might not be as easy to do as it seems. Estate planning attorneys often include very detailed language that covers a variety of “what ifs” in the event that you or your loved one become disabled. Such language is not contained in the Statutory Form Power of Attorney.
  • Requires that a financial power of attorney be acknowledged before a Notary Public or other officer authorized to take acknowledgments.
  • Permits electronic signing, and – by inference – electronic notarizing of the document. Using such a financial power of attorney in real estate transactions may be problematic, however. Once again, an experienced estate planning attorney should be consulted.
  • Permits a financial power of attorney to be signed by another person in the principal’s conscious presence, if that person is directed to sign by the principal. It is unsettled as to whether the agent may act as this proxy signer, so caution on this point is essential.

If it has been at least five years since you executed a financial power of attorney, you should execute a new one, as many financial institutions have a policy of not honoring documents that are over five years old. If you have any concerns about your current financial power of attorney, you should consult with an estate planning attorney.

 

 


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