As many of you know Aretha Franklin passed away on August 16, 2018 after a battle with pancreatic cancer. Ms. Franklin will be known as a legend and the “Queen of Soul” for years to come, but she will also be known as one of the celebrities who never set up a will or trust.
This is a lesson for everyone to make sure they have a will or a trust and that the will or trust is updated as you age and your life changes. This document should change with you and your life circumstances.
Aretha Franklin was not married when she passed away and left behind four boys, including a child with special needs who will need help managing his finances for the rest of his life. Because she left no will she died intestate (without a will), meaning she has now left the courts in her home state of Michigan with the final decision on where her assets will go; which is a scary scenario for many.
What is even scarier is what happens if you leave minor children behind when you die? For those of you that have children under the age of majority, dying without a will or a trust can mean if children are left without parents and there is no document to determine who will be their guardian a court must step in and decide for you who the new guardian will be. You never want to leave anything up to a third party as far as determining distribution of your assets or the raising of children; you should want your decision and what your desires are to be the determining powers.
In Ms. Franklin’s case, according to Michigan Law, the assets and property of a single or widowed individual who dies without a will are divided amongst their children if they should so have any. Aretha lucked out because she does have children that her fortune (approximately eighty (80) million dollars) can be divided amongst.
However, there are still many issues her family will face moving forward because of the lack of a will or trust. First and foremost there is a special needs child that is set to likely inherit roughly twenty million dollars. If Aretha had a will or trust this document could say how his portion is supposed to be set aside or managed for his care and who will do the managing. Without these provisions he could lose whatever benefits he may have had or there is a possibility without some guidance he could be taken advantage of and lose his inheritance rather quickly. (Please note that although unlikely Aretha’s child is on any government programs, your loved ones who may not have famous mothers to help them out could very well be on these programs and the idea is to set up trusts for them so they do not lose these government funded programs).
There is also the issue that Aretha who was a very private woman when it came to her finances and estate will have her whole probate estate available for public viewing. Once you go to the courts to probate a loved one’s estate it becomes public record and anyone can learn information about you and your worth at death. This is why many wealthier individuals tend to have trusts set up so the probate process need not occur and everything can remain private.
Besides, determining the distribution and what will happen with Aretha’s estate it is likely now that because there was no will or trust, Aretha’s estate and personal representative will be paying Uncle Sam a hefty bill that could have possibly been avoided if there was enough preplanning done before she passed. There would still have been taxes if preplanning was done but the amount of taxes being paid could have been greatly reduced.
Finally, what we tend to see with high profile probate proceedings are they can drag on for years and lead to infighting amongst family members. Although, everything seems to be going fine in Aretha’s case now, it is far too early to predict whether that will continue especially when it comes to complicated issues such as music rights.
You may say well I do not have a multimillion dollar estate so why worry about a trust or will but that is not the way to look at Aretha’s case. Look at it as a cautionary tale of someone who had everything that she ever wanted and a fortune she worked hard for but because she did not have a will or a trust her intentions on how she wanted her legacy or estate to pass does not matter. The state of Michigan court system will be the determining figure as to how her property gets divided.
You work hard for your money and your property and you want to be the one to determine how it gets distributed after death, not Michigan or Pennsylvania or whatever state you may reside in when you pass away. If you have specific bequests, want to care for a special needs family member or maybe want to disinherit a child you need to put these things in writing. If you do not it is up to the courts to divide your assets and they will not make specific bequests or disinherit children.
Do not be like Aretha; do not delay in talking with an elder law attorney about estate and trust planning. It may not be an easy conversation to have at first but you will be happy you did it in the end.