What Luke Perry Teaches Us About Estate Planning

On March 4, 2019, actor Luke Perry passed away at the age of 52-years-old from a massive stroke. Perry, as many of you remember, played the heartthrob Dylan on the 90’s television drama 90210.

It would seem that death and disease know no age. So while we all operate optimistically that we’ll live for a hundred years, the statistical analysis about life expectancy is quite different. In fact, the CDC found that American life expectancy is falling rather than increasing and that we are dying at an average age of 78.6 here in the United States.

Ok, so this isn’t exactly uplifting news or a topic that most people seek out to know more about. And what does this have to do with personal finance anyway? Well, as Luke Perry’s recent and sudden passing highlights – a lot, actually.

Luke Perry had an estate plan. Recent news articles report that he created his in 2015 after a cancer scare. Whatever the catalyst for prompting him to create his estate plan, here is what his preparation teaches about estate planning and why everyone should have an estate plan in place.

  • Detailing your end-of-life wishes helps your family make difficult decisions on your behalf.

Through an Advance Directive or Power of Attorney, you document who can make medical decisions on your behalf if you are unable to do so on your own. Also, you can provide your clear choice of what type of care you want under extreme circumstances.

In the case of Perry, the fact that he had these items documented within his estate plan made it possible for his family to make the difficult decision of taking him off of life support without needing to go through the prolonged and expensive legal process in a probate court if other family members disagreed with the decision.

  • Your wishes about who inherits your assets (and how) upon your passing are clear.

Perry has an unverified net worth of around $10 million, which he left to his two children. A revocable living trust or will allows you to name beneficiaries for your property, leave property to young children, and revise as your circumstances or wishes change.

More than just determining who inherits your financial assets when you die, an estate plan can (and often does) include details about how these assets should be distributed. For example, you may want your assets to remain in your trust until your children turn 18 or 25-years-old, at which point they are given full access to their inheritance. Sometimes, parents will have funds distributed at certain life milestones like a marriage, or transferred over to them over a series of years, such as: 25, 30, and 35.

  • Your family can avoid probate.

Probate is a costly, time-consuming, and very public process. However, if you have a revocable living trust in place, assuming all your property was properly transferred to the trust, your assets will transfer directly without any involvement from the courts.

  • Updating your beneficiaries is wildly important.

When you have an estate plan in place with a will and revocable living trust, what is documented therein is fairly airtight. In the case of Perry, his two children are named in his 2015 estate plan. However, since then he became engaged to a woman he was set to marry in August 2019.

Because they were not married at the time of his death, if he did not update his estate plan at some point prior to his passing naming her as a beneficiary, she stands to inherit nothing from his will or trust. Unless he happened to have a separate life insurance policy with her named as the beneficiary, her status as his fiance is not enough in the state of California to override his expressed wishes in his estate plan.

Therefore, if you do have an estate plan or will now create one, be sure to update your beneficiaries often and when applicable. You should also keep up to date on the beneficiaries named on accounts that do not get titled to a trust, such as IRAs, 401(k)s and the like.

  • Estate planning isn’t something you wait to do.

We don’t have a crystal ball we can look into to see the exact date we will come to our end here on earth. As uncomfortable as that idea is, protecting your loved ones with a properly executed estate plan is a gift you can leave behind to the people who matter most to you in this world.

[Related Content: What Happens to Your Kids If You Die?]

Perry was young. There was no reason to suspect that March 4, 2019, was going to be his day. His children are also young. His son Jack is 21-years-old and his daughter Sophie is 18-years-old. Imagine how much harder his unexpected passing would have been if he didn’t plan in advance.

As a fiduciary financial advisor, I do not provide legal services or draft trust documents, but I do work with you and your estate planning attorney to detail your assets and facilitate the decision-making process. If this is an area of your financial planning you have been putting on the back-burner, let’s get to work. I can also make referrals to estate planning attorneys if you are looking for recommendations.

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