Aretha Franklin, who died last month at the age of 76 after battling pancreatic cancer for years, will forever be the undisputed Queen of Soul. Unfortunately for her heirs, despite her long illness and having trusted attorneys on retainer, she had no estate plan—not even a simple will. Aretha Franklin's estate will be divided according to Michigan's intestacy law, which governs inheritance when the deceased had no will.
Aretha Franklin was not married at the time of her death, and left behind four sons, Clarence Franklin, Edward Franklin, Kecalf Franklin, and Ted White, Jr., who range in age from 48 to 63 years old. Ms. Franklin's eldest son, Clarence, is legally incapacitated, and his interests are represented by a legal guardian.
Under Michigan law, Ms. Franklin's sons will each take an equal one-fourth share in her estate. No conflict has been reported among her sons or other family members regarding the estate, and it is reported that Ms. Franklin's niece has agreed to serve as personal representative (administrator) of her estate.
Aretha Franklin's estate is valued at approximately $80 million. That figure includes her various real estate holdings, personal property such as cars, art, and jewelry, financial accounts, investments, and intellectual property, namely music copyrights. Obviously, that is a much more significant and complex estate than most of the rest of us will expect to leave, but many of the problems that could emerge in the process of administering Aretha Franklin's estate could also crop up in yours.
One problem is conflict among heirs over who gets what. While there is no indication that that is currently an issue in the Franklin family, the process has only just begun. Dividing this estate will not be as simple as splitting a bank balance into four parts. Who gets this piece of land, or that car? Who holds the rights to a certain song? Untangling this issue is likely to take years, and tens or hundreds of thousands of dollars in legal fees.
Not only could the distribution of assets play out messily, it will do so publicly.
Not only could the distribution of assets play out messily, it will do so publicly. Aretha Franklin was notoriously guarded about her personal life and private business, but probate matters are public record, so the administration of her estate will be open to prying eyes. You may not be as well-known as Aretha Franklin, but if you don't have an estate plan, anyone who wishes will be able to access public probate records regarding your estate.
Then there is the matter of taxes. Very few people wind up paying estate tax, because the amount of assets that is exempt from estate taxation is $11,180,000 for an individual. For the fortunate few who have assets exceeding that amount, like Aretha Franklin, irrevocable trusts and other estate planning tools can greatly reduce the tax burden. Because Ms. Franklin had no such tools in place, 40% of the value of her estate will likely go to the federal government. It could take a while to determine exactly what that value is, too, since there is no estate plan containing an inventory of assets.
Last but not least, though not much is known about him, Ms. Franklin's eldest son Clarence has unspecified special needs for which he is expected to need care and assistance for the rest of his life. Had Ms. Franklin had an estate plan in place, it could have provided for him to receive the care he needed for the remainder of his life. In particular, a special needs trust could have protected Clarence's ability to receive public benefits. Ms. Franklin could also have created a financial plan and letter of intent to help guide his caregivers and others responsible for meeting Clarence's needs.
One might think that if anyone would have an estate plan, it would be Aretha Franklin: she had significant wealth and a loved one with special needs. She loved her family deeply, was attentive to her business dealings during life, and was a notoriously private person. What's more, she was in her seventies, and had battled a terminal illness for years. It would seem that she had every motivation in the world to make an estate plan, in addition to the resources to do so. In fact, at least two of her longtime attorneys had urged to make an estate plan.
According to reports, Ms. Franklin never openly rejected the idea of creating an estate plan. She simply never got around to it, and then one day it was too late.
In that regard, this woman who was extraordinary in so many ways was very much like most other people. She was well aware that she needed an estate plan, but there was always something more pressing to attend to in the moment. Unfortunately for the people she loved so much, the next couple of years will likely be spent trying to untangle what is left of her estate after the government takes its share.
If you have been putting off making your own estate plan, we invite you to take less than 60 seconds to start the process: contact our law office. Your loved ones will be glad you did, and you will probably sleep a little better at night yourself.
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