Aretha Franklin, the “Queen of Soul,” died this month, at the age of 76. According to news reports, she was worth $80 million and died without establishing a Will or trusts for the beneficiaries of her estate. Her death highlights the importance of establishing an estate plan–even a simple one–to avoid unintended consequences.
At the time of her death, Ms. Franklin was a resident of Michigan, unmarried, and survived by her 4 children. Under Michigan’s intestacy laws, her children will share in her estate equally, regardless of Ms. Franklin’s relationship with them. Her grandchildren, other family members and charities will have no rights in the estate. Additionally, one of Ms. Franklin’s children apparently has special needs, and this child will inherit his ¼ share outright and free of trust. The children are also equally entitled to serve as Personal Representatives (also known as Executors or Administrators) of the estate. Litigation is possible because of competing interests and the amount of money involved. It is unlikely that Ms. Franklin would have agreed to such an outcome if she had been aware of the consequences.
Even though she had a sizable estate, Ms. Franklin would have benefited from executing a Will, even a simple one. The two most important questions about a Will are (1) Who should inherit my property? and (2) Who should manage my estate? Without executing a Will, those questions are left to the default “intestacy” provisions of the state where one resides. The intestacy provisions treat all relatives at the same familial level as equals, regardless of whether a Decedent actually wanted the family member to be a beneficiary of her estate. Often, a surviving spouse is only entitled to ½ of a Decedent’s estate if no Will has been signed. Estranged children are entitled to the same share as a child who has a good relationship with a Decedent. While unfair, these are the results when one dies without a Will. These are serious issues that can come up in any type of estate, not just large or high-profile ones.
Do you have a question about preparing your Will and avoiding intestacy? Contact Peter E. Iorio to discuss the best way to take control of your estate plan.