The Queen of Soul, Aretha Franklin, passed away recently after a battle with pancreatic cancer. Soon after her death, court filings revealed she died without any estate plan, such as a will. Without an estate plan, the dissolution of her estate will play out in public. If someone dies without a will in Michigan, the legal community refers to that deceased dying intestate. The courts then become involved in winding up the estate.
In Aretha’s case, the lack of will may prove quite problematic. Her financials will become public as the estate is probated, a situation most would prefer not be public. Furthermore, when someone dies without an estate plan but has significant business interests- such as her music rights- the estate can drag on for many years, as people fight over who owns those rights, which are quite valuable.
Prince also died without a will or other estate plan. The resolution of his estate is ongoing, and caused “numerous family disputes and even the revocation of a multimillion-dollar music deal.” A similar situation may befall Aretha’s estate, as family members bicker over rights and assets, and others come out of the woodwork making claims upon the estate. Clearly, resolving all these claims takes time; and court and attorney time is expensive. Aretha’s estate is likely to worth significantly less due to the costs of resolving the estate due to the lack of a will. Her estate has an estimated value of $80 million, and the lack of a will means that someone else will dictate how Aretha’s assets are to be divided, which is unlikely to be how she wanted her estate resolved.
Having a will would have lessened the complications. A trust would be preferable, particularly since trusts are commonly confidential, whereas Aretha’s will would be public had she had one. Furthermore, a probate estate assets may be taxed and will be subject to the inventory fee, a graduated fee based on the gross assets of the estate at the time of death.
When an individual has significant wealth and/or significant business interests or intellectual property, proper estate planning is critical. Confidentiality, royalties, asset distribution, protection of intellectual property rights, taxes and more are all considerations for these estates. Furthermore, an estate plan may need to be altered when Congress or state legislatures change tax laws.