No matter how reluctant we all are to admit it, most of us are fascinated with celebrities – especially when that celebrity is of the caliber of Aretha Franklin. The Queen of Soul offers us all yet another lesson in the importance of estate planning by passing away without even a Last Will and Testament in place. Her estate highlights many of the reasons why dying intestate should be avoided.
The Queen of Soul Is Gone
Aretha Franklin died on August 16, 2018 after years of battling pancreatic cancer. The Queen of Soul was surrounded by family and friends at the time of her death. So far, her family has banded together quickly; however, as we have seen before, that could change in the weeks, months, even years to come as the complex task of probating her estate gets underway. Why? Because despite leaving behind an estate valued at over $80 million. Aretha Franklin did not leave behind a Last Will and Testament or trust.
On August 21, 2018, one of Aretha’s four sons, Kecalf Franklin, along with a Detroit-area attorney who worked with Aretha for more than 40 years, filed the paperwork to open probate with the Oakland County Probate Court. Kecalf asked the court to appoint Aretha’s niece, Sabrina Garrett Owens, as the personal representative to administer the estate. Aretha’s three other sons consented to the appointment, including Clarence whose consent was provided by his court-appointed guardian and conservator.
One of the key drawbacks to dying intestate, or without a will or trust, is that it makes the probate process much more difficult and prone to family fighting. This is particularly the case when there are children from different relationships and marriages, who may not see eye-to-eye. The fact that Aretha’s four sons could come together so quickly to appoint a trusted family member to act on behalf of the estate is a great sign that a family feud may not plague Aretha Franklin’s estate, as it has so many others.
In fact, the family met together, along with the attorney who filed the probate documents, on August 15th – the day before Aretha died. This enabled the process to begin very smoothly and quickly, avoiding the necessity of a public court hearing. Instead, the family was able to proceed with an informal application, meaning that it was processed without a court hearing or even review by the assigned Judge. Informal proceedings can only happen in intestate cases under Michigan law if all of the interested persons agree to it.
While it appears that Aretha’s heirs are working together at this point, that could easily change at any point during the probate process. Moreover, conflict could arise between the heirs and the personal representative, despite everyone agreeing to her appointment. Under Michigan law, all four of Aretha’s children are equal beneficiaries to the Estate. But, they do not have an equal say on how the Estate is administered. Instead, Aretha’s niece (Owens) now has all decision making power and a number of difficult decisions will have to be made in the near future. How are Aretha’s many royalties to be managed? What should be done about the expected numerous offers for sanctioned movies, documentaries, books and specials about Aretha’s life? Should Aretha’s songs be used for commercials? Should her image be licensed to sell products?
Additional issues will likely come up as well. How much will Aretha’s estate owe in federal gift and estate taxes? Without an estate plan, she clearly failed to take steps to avoid paying taxes. Her estate has to file an estate tax return though to allow the IRS to determine how much will be owed in estate taxes and there could be a major battle over how to value Aretha’s publicity rights. Furthermore, the value of her music, performances, and publicity rights could skyrocket as a result of her death if managed well.
Finally, because she failed to do any estate planning, Aretha’s heirs will receive their inheritance (whatever amount that ends up to be) in one lump sum – for better or for worse. If Aretha had created a trust, either a living trust or a testamentary trust through a will, then she could have determined when and under what conditions her sons would receive their inheritances. The personal representative does not have the right to delay distributions to protect a beneficiary who cannot handle funds so we can only hope they are capable of doing so. One of Aretha’s sons already has a conservator; however, the other three will be given their inheritance outright.
By failing to leave behind an estate plan, Aretha’s wishes about what happens to her assets do not matter, legally. Sadly, she also gave up the right to determine how her legacy (and she WILL have one) is handled as well. Instead, Sabrina Garrett Owens will make these decisions.
Contact an Illinois Estate Planning Attorney
For additional information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding estate planning in the State of Illinois, contact the experienced estate planning attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.