Aretha Franklin, also known as the Queen of Soul, recently passed away at age 76. She had amassed a fortune estimated at over $80 million. (And experts agree that figure will continue to rise). Even though her long-time attorney had reportedly advised her for years to set up a trust, she never did.
Because she had no will, her home state of Michigan will essentially write her will for her. Since at her death she wasn’t married, her children will likely inherit her assets outright. And they will inherit much less than they would have if Ms. Franklin had properly planned. And the charities or causes that Ms. Franklin supported over the years aren’t entitled to anything.
Without a will, Ms. Franklin didn’t get to choose who will be in charge of her estate, including who can control her music catalog. Her children, assuming they can agree, will decide who will be in control. And all of this is going to be played out in public view, including the valuation of her assets, her music catalog…. everything.
No Tax Planning
Because Ms. Franklin didn’t do any tax planning, by the time her estate gets settled, there’s going to be a lot less left of it. The federal estate tax emption is $11.18 million per person. Because the estate is worth over $11.18 million, the federal estate tax applies. (At least her home state of Michigan doesn’t have an estate tax). So assuming she didn’t use any of her exemption during her lifetime by making taxable gifts, there’s going to a big estate tax bill. The estate tax is calculated at a flat 40 percent rate!
Through proper estate planning, Ms. Franklin could have helped preserve the fortune that she worked so hard to build. For example, charitable planning could have helped reduce the estate taxes owed. Also, with proper planning, such as through life insurance, she could have created liquidity to pay any taxes due, so they wouldn’t have to come out of her estate.
Inheritance At Risk
Since her children are going to inherit her fortune out right, anything that goes to them will be included in their own estate for estate tax purposes. Also her children’s inheritance may be available to creditors or to their spouses if they get a divorce.
There’s a very high chance that this estate is going to take years to settle. Look at other famous celebrities like Prince who passed away without a will. Prince passed away over 2 years ago, and his heirs have still not received a penny of his estate.
Hopefully, Ms. Franklin’s children will be able to focus on preserving their mother’s legacy, which is more than just the value of her estate. Not only was she a music and style icon, she impacted the civil rights and women’s movement. Even though Ms. Franklin herself didn’t implement an estate plan, her children have the chance to make it right for their own families. And now they have a chance to create proper legacy plans for themselves that will ensure that Aretha Franklin’s legacy will live on and continue to impact audiences over the world for many generations to come.
We Can Help
Not only can our firm help you ensure that your final wishes are honored, we can help preserve what you worked so hard for. And we can help keep your family out of conflict and out of court in the event of your death or incapacity.
This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents. She ensures you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why Myrna offers a Planning Session, during which you’ll get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Begin by calling our office today to schedule a Planning Session. Mention this article to find out how to get this $500 session at no charge. Call us today at (813) 514-2946 to get started.