Aretha Franklin was known as the “Queen of Soul.” She was a singer, songwriter, civil rights activist, and so much more. Aretha was a great recording artist, with a career spanning many decades. She received honorary degrees from many prestigious universities, like NYU, Princeton, and Yale. Aretha died on August 16, 2018, at age 76, without any will or trust. In other words, she died intestate, which leaves implications for her family.
First, state law will decide how her assets are divided. Aretha resided at death in Detroit, so the intestate succession laws of Michigan will control. Since she was not married at her death, her assets are expected to be divided among her four sons.
Second, her estate will go through a public process to transfer title of her assets, known as probate. This process will happen in the local court in Detroit. People will know how much she had in assets, reportedly about $80 million. That means that the public will know how much each of her four sons will be inheriting, approximately $20 million. Also, the particular filings and information are expected to be public knowledge, as anyone usually can read about the estate and the decedent’s assets. And even if the proceedings commence smoothly, estates are always prone to family disagreements about how administration occurs. This means that although each child is an equal heir, they do not have an equal say about the specific actions of the executor.
Third, the assets will be inherited by each of her sons outright. This may not be the best way, as creditors may be able to reach the inheritance. For example, one of her sons might have asset protection concerns. If Aretha had left his share in a discretionary trust with a third-party trustee, the assets could be protected from creditors.
Fourth, since the assets will be inherited by each of them outright, they could be comingled with other assets and not protected from being divided with a spouse upon divorce.
Fifth, since each son will be inheriting about $20 million, they might face an estate tax at their death. Instead, trusts could have been set up to help plan for tax reduction.
Aretha’s estate could be tied up in the probate process for many years, and the lack of planning could cost her children substantial amounts. The takeaway here is that you do not need millions or be a celebrity to plan your estate. We all have something. Sinclair Prosser Gasior can develop a complete plan with you to ensure your family is protected and that you have maximized their inheritance. If you do not take the opportunity to plan now, think of the problems that may arise during incapacity and distribution of your estate, or the potential conflicts that could arise between even the best of family relationships.