Prince Rogers Nelson, one of the most beloved pop icons in history, spent his life fighting to maintain creative and legal control over his career. Yet, in the months that followed his death, it became evident that he had not been quite as vigilant when it came to legally documenting what would happen to those assets after he died. In other words, Prince died without a will. As a result, his substantial estate - his alleged vault of unreleased music, his roughly $300 million in various assets - have become a cautionary tale that everyone can learn from.

What Happens in the Absence of a Will?

Prince's estate is being handled by the state. This means that the state appoints an administrator (who may not be a person you would approve of), and your assets will be distributed to the next of kin. This can be problematic for a number of reasons. First, the state must establish who your true heirs are. Second, the distribution to those heirs may not resemble your wishes.

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According to the several financial studies, between 40 to 60 percent of Americans live paycheck to paycheck, meaning that they earn just enough to get by. For many, the thought of an early retirement—or any retirement—is not a current achievable goal because there are no funds left over each week to put into retirement savings.

Financial advisors have discovered ways that can free debt committed paycheck funds and can therefore be redirected into a retirement savings nest egg. For example, only one in three households in this country prepare and follow a monthly budget as a way to track their spending. This can lead to a lot of wasteful spending. By following the trail of where those paycheck funds go, you may be surprised at how much is actually coming in and going out.  

Families can also take a look at eliminating expenses that may be unnecessary and divert those funds into savings. Some of the biggest potential expenses include cable and satellite television packages. How many of those 450 channels does your family actually watch? If your family is also big take-out consumers, consider cooking more meals at home. There is often a large price difference in the per plate cost for a meal you prepare compared to the per plate cost of that meal from a restaurant. Magazine subscriptions and gym memberships are also areas that may be able to be cut or downsized.

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Making legal plans to ensure that your family is taken care of in the event of your death is not an easy subject to consider. It can be even more difficult for those who are parents of young children.

Although none of us want to think that we will not live long enough to see our children grow up into adulthood and have children of their own, the sad fact is that many parents pass away when their children are still minors. Therefore, it is important to have these plans in place, including who would be the legal guardian to your child in the event both of his or her parents die. If you do not make the decision while you are still alive, the state will make that decision when you are gone.

Often, when parents are having the discussion over who should be the legal guardian of their child, they disagree. The father may want a relative from his side of the family, while the mother may think one of her relatives would be the best choice. However, there are certain questions that parents can ask themselves as they make their list of the pluses and minuses for each of their choices.

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Millions of people take advantage of the convenience of online banking and bill paying, including setting up automatic withdrawals from their checking accounts each month. In many cases, it is done out of convenience. However, with some creditors, automatic payments may also be part of the stipulation for repayment, as in a loan repayment plan. When a person dies, and his or her bank accounts are closed, one would think that these automatic payments stop. Yet this is not always the case. Many families find that months later, they are dealing with "zombie bank accounts."

When a person opens up a checking account, he or she is given disclosure paperwork by the bank. Often included in those disclosures is the bank's right to reopen a closed account if a debit or credit arises. Banks do not have to decline the transaction. Moreover, they are also not required to notify the customer that an account has been reopened.

In one case, it actually took an overdraft of $888,888.88 to finally close a zombie account of a deceased California man. Several days after the man had passed away, his son went to the bank and closed his father's accounts. However, what the son did not know was that his father was paying hundreds of dollars every month to several payday loan companies. As part of the stipulation of the loans, these lenders automatically deducted the funds from his checking account every month. These deductions automatically reopened the account and it began showing a negative balance and racking up overdraft fees.

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Drawing up a will is something that most people know they should do. However, for one reason or another, many never get around to doing it. Moreover, when they die, it often leaves major legal issues for their loved ones to sort out.

When a person dies without a will, it is referred to as intestate. We hear story after story about families locked in major battles over a family member's estate, which often results in a manner that the deceased person would not have wanted. The only legal choice, however, is the one made by the court because there was no will.

This is the case with the estate of the late granddaughter of actor Morgan Freeman. Last August, the 33-year-old woman was stabbed to death. Her estate included a condo, worth approximately $800,000, that Freeman had purchased. When the young woman was murdered, she was not married, nor did she have any children or siblings. She also died intestate. According to New York law, where the young woman lived, her estate will go to her mother and father because she did not have a will.

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