Soon after Aretha Franklin's death this August, news broke that the celebrity, worth an estimated $80 million, failed to create an estate plan prior to her death. Franklin's attorney asserts that although the singer understood the need to create an estate plan, like many Americans, she just...never got around to it.
Under the laws of the State of Michigan, Franklin's assets would be divided equally between her four sons. Because of Franklin's celebrity status, no estate plan means that there is a strong possibility that extended family members, friends, or other individuals will try to claim a stake in Franklin's estate. Such contests could tie up Franklin's assets in the court system for many years to come.
So, how could Franklin and her family have benefited from an estate plan?
1. A will or trust would have eliminated questions regarding how Franklin's assets should be divided. In addition to fending off potential claims from opportunists, by planning ahead, Franklin could have provided a clear plan for passing her wealth to her four sons, in particular her eldest son who has special needs and is represented by a legal guardian.
2. Franklin could have utilized a trust to keep her assets out of the probate court. By eliminating probate court involvement, Franklin would have effectuated huge time and money savings for her family.
3. While a will would have provided a road map for dividing Franklin's assets, wills become public documents once they are filed with the probate court. Trust documents, on the other hand, are not made public and would have allowed Franklin to manage her affairs privately. Unfortunately for Franklin's family, the administration of her estate will be a very public ordeal.
Although decisions regarding what will happen to our assets after we pass away can seem daunting, planning ahead provides peace of mind for both the testator and the testator's family. With a little planning, questions and controversy can be easily avoided.