T-R-U-S-T and R-E-S-P-E-C-T

by Donald Kingett, Esq.

Many people associate the term “Estate Planning” with the rich and famous.  “Only millionaires and celebrities need estate plans.” First, that couldn't be further from the truth, but I will come back to that later. Secondly, there are even a surprising number of millionaires and celebrities that have died without an estate plan.

Aretha Franklin passed away on August 16, 2018 at the age of 76. At the time of her death she was estimated to have a net worth of approximately $80 million. She did not however, have an estate plan in place. This is actually quite shocking considering the fact that she was well known for being very particular when it came to her finances and her contract proves that she paid extreme attention to details. She made it abundantly clear that she was going to be the one in charge…right down to the operation of the air conditioning.

Promoters were required to pay $25,000 in cash as a down payment prior to her performance. Her contract specifically states:

She was also said to have kept that money under guard in her dressing room, and sometimes, even with her on stage. This was not unfounded paranoia though. Early on in her career, “she saw so many people, like Ray Charles and B. B. King, get ripped off” her friend Tavis Smiley said in an interview with The New Yorker. Aretha Franklin learned from their experiences and she refused to be taken advantage of.

So, the fact that she did not have a trust, or even have a will, despite her attorney Don Wilson’s encouragement, is vexing because it leaves so much up to chance. According to Michigan state law, since Aretha Franklin was not married and died without a will, her assets will be divided and distributed equally among her four children.

On the surface, an equal split doesn’t seem to be too terrible of a situation. Except that, when you look at the situation closer, Aretha Franklin’s oldest son, Clarence, has special needs. He requires extensive financial assistance and support. However, since she did not have a will or a special needs trust, this won’t be taken into consideration when her estate goes through the probate court. This means all of her property, copyrights, record deals and other assets will be collected and evaluated. The beneficiaries will need to be officially determined and all outstanding debts will need to be paid along with any legal fees accrued during the process. Only then, after about nine to 12 months if everything goes smoothly, will the assets be distributed equally to the beneficiaries.

Again…NINE TO 12 MONTHS IF EVERYTHING GOES SMOOTHLY! Relationships have been ruined over splitting a $13 tab at a diner. So do you think that $80 million dollar payout of her estate will be distributed peacefully? Time will tell, but I'd be willing to bet that more than a few problems will arise (or will be created by lawyers) and the administration of her estate will not be a simple process. Oh and I forgot to mention that, since there was no will or trust in place, all of these financial records will be available to the public at the Oakland County Probate Court.

Do not delude yourself into thinking this is a fate that is solely reserved for famous people. If you die tomorrow without a will, your estate goes through the procedures for an "intestate" estate. And if you die with only a regular will, without a trust, more specifically a living trust, in place, all of your finances and to whom they are distributed to, will be made available to the public.

Even though it can be a stressful topic and more than a little depressing, you will be able to save your loved ones from a great deal of financial and emotional suffering by taking the time to sit down with an experienced estate planning attorney and making sure you get the R-E-S-P-E-C-T you deserve!

***Disclaimer: This article does not constitute legal, accounting or other professional advice. Only through a personal, confidential consultation with qualified legal counsel can anyone properly evaluate their own unique Tax or estate planning challenges and determine what, if any, appropriate legal strategies and tactics should be implemented to meet those challenges.”***