As many in the country mourn the loss of Aretha Franklin, some of us are a bit surprised to discover the Queen of Soul passed intestate, without a will or estate plan.
Without such planning, the estate goes through probate, probably doomed to a long, drawn-out process, considering the value and complexity in this situation. Reports indicate Franklin owned four homes and demanded to be paid for her performances in cash. She was often photographed wearing furs and jewels. Aside from the many material property aspects, Franklin retained ownership to much of her music compositions. The intellectual property value of this catalog hasn’t been determined yet, and probably won’t be for a while.
Uncle Sam will take a large portion of the songstress’ estate in the event there was no estate tax planning in place. Remember, under current tax law, the first $11.2 million is exempt from Federal estate tax, but over and above that amount will be taxed at a 40 percent rate.
According to the NY Times, Michigan law allows for the decedent’s children to divide the estate equally. That’s good news for Franklin’s four sons: Ted White Jr., and Clarence, Edward and KeCalf Franklin. However, the equal distribution will be decreased significantly because of the probate, administrator fees and attorneys’ fees. Valuing the rights to her music and likeness will be an expensive task as well.
No one knows yet what Franklin’s estate is worth, though it could be in excess of $80 million – without the rights to her music catalog. Probating the estate could mean more than $1.6 million to the administrator and the attorney administering the estate. If extraordinary services are required during the administration (such as selling real estate, a business or memorabilia), that number could rise significantly.
It also means the Queen of Soul foregoes her much valued privacy, as this all plays out in a public courtroom. Creditors will come forward to make claims. Long-lost family members and friends may also come forward to angle for a cut. And once all of that dust settles, there comes a run for her music, for product advertising, movie soundtracks, remixed albums, maybe her life story, and more.
The circus to follow will be something to watch. Just remember that you don’t have to put your family through an experience such as this. If you own property, even if it’s just a single home, estate planning can help avoid the unnecessary cost, the squabbles and funds going to places you didn’t intend.
