Aretha Franklin Died Without an Estate Plan Leaving Her Legacy In Jeopardy

As fans across the globe mourn her death and prepare to pay their final R-E-S-P-E-C-T to the late Aretha Franklin, creditors and predators are likely preparing to claim their share of her estate worth an estimated 80 million dollars.

According to legal documents filed in a Michigan court, the beloved Queen of Soul died intestate (without a valid will). As a result, Michigan’s intestacy laws will govern the administration of her estate. Her estate will be settled in probate court and become public record. The court will distribute her assets in accordance with statutory requirements. Under Michigan’s laws, Franklin’s four sons will receive equal shares of her probate estate. Does that mean that each son will immediately receive 20 million dollars? It is highly unlikely that they will receive 20 million dollars and it may be years before they receive their share. Generally, heirs receive the residuary estate-what’s left after all debts and claims are satisfied. Because she died without an estate plan, her estate could end up in a highly contested legal battle among many parties claiming rights to her estate. Litigation could last for years and incur excessive attorney and probate fees. Before her sons receive their share, they will have to wait until taxes, creditors, attorneys, and probate fees are paid and all legal claims are settled.

Given her efforts to maintain control and ownership of her music and to keep her personal life private during her lifetime, it is shocking to learn that Franklin made no efforts to create an estate plan to provide the same protection after she died. Much of the focus has been on the fact that she died without a will. While a will would have allowed her to decide to whom her assets would be distributed upon her death, it would not have provided the control and protection that she sought to preserve.  A will must go through probate and therefore, would not have provided the privacy she fought so hard to protect. In addition, a will does not protect assets from creditors or predators.

According to reports, Don Wilson, Franklin’s attorney that represented her in entertainment matters, encouraged her for years to establish a trust. A trust provides the protection she seemingly valued. A trust would have allowed her to transfer ownership of her assets into a legal entity and establish rules regarding the use and distribution of those assets. A trust can be used in lieu of a will to structure assets in a manner that prevents creditors from attaching liability to those assets. Because the assets in the trust are owned by the trust, not the estate, the estate’s liabilities are not attached to the trust. Had she placed all of her assets in the trust, the trust, not the estate, would be valued at 80 million dollars.  Unlike a will, in addition to minimizing tax liability, a trust avoids probate therefore, it would have allowed her to maintain her privacy and expedite her sons’ access to their share of her assets.

The Queen of Soul worked decades to control her assets and protect her privacy. However, her decision not to create an estate plan, jeopardizes it all. A large sum of her assets will be used to pay inheritance taxes, legal and probate fees- fees that could have been avoided. The administration of the estate and any legal battles will be on public display as attorneys argue over ownership of her remaining assets. The final chapter of such a distinguished career will be tarnished by consequences of her decision not to protect her assets, her privacy, or her legacy.

While we may not know why the Queen of Soul chose to risk so much when reportedly, the opportunity to protect it all had been presented to her, we do know that she is not alone. According to reports, 60% of Americans do not have an estate plan. As we’ve seen in many high profile cases, the decision not to create an estate plan can be costly both financially and emotionally. If you’re interested in protecting your loved ones and your assets, contact an attorney in your state.  For additional information, visit www.ReedShermanLaw.com. For Maryland or D.C. residents, click here to schedule a consultation.