What You Can Learn From Aretha Franklin
Aretha Franklin, heralded as the “Queen of Soul,” died from pancreatic cancer at age 76 on August 16th at her home in Detroit. Like Prince, who died in 2016, Franklin was one of the greatest musicians of our time. Also like Prince, however, she died without a will or trust to pass on her multimillion-dollar estate. Franklin’s lack of estate planning was an unfortunate mistake that will undoubtedly lead to lengthy court battles and major expenses for her family. What’s especially unfortunate is that all of this trouble could have been easily prevented.
A common mistake Sadly, Aretha is far from alone in her lack of planning. A 2017 poll by the senior-care referral service, Caring.com, revealed that more than 60 percent of U.S. adults currently do not have a will or trust in place. The most common excuse given for not creating these documents was simply “not getting around to it.” It seems that Franklin was among this group. Her attorney of 28 years was quoted as saying “I tried to convince that she should do not just a will but a trust while she was still alive. She never told me, ‘No, I don’t want to do one.’ She understood the need. It just didn’t seem to be something she got around to.”
Franklin’s estimated $80-million estate will now have to go through the often lengthy court process known as probate. Her assets will be made public and there could be a big battle brewing for her family.
Probate problems Because Franklin was unmarried and died without a will, Michigan law stipulates that her assets are to be equally divided among her four adult children. One of her children has special needs and will need financial support for the rest of his life. It’s likely that caregivers for her son will not be able to immediately accept the inheritance coming to him, since that could cause him to lose all governmental support he may have been able to receive. More likely, they will need to ask the court to create a Special Needs Trust for him, which could involve extensive court proceedings.
It’s also possible that probate proceedings could last for years just due to the size of her estate. And all court proceedings will be public, including any disputes that arise along the way. Contentious court disputes are common with famous musicians. In Prince’s case, his estate has been subject to numerous family disputes since he died two years ago, even leading to the revocation of a multimillion-dollar music contract. The same thing could happen to Franklin’s estate, as high-profile performers often have complex assets, like music rights. Because these court battles will be public, not only will the contents of Franklin’s estate be available for everyone to see, but her family’s potential squabbles will likely be the subject of news headlines. All of these things could’ve been prevented with a well-drafted and counseled estate plan.
Learn from Franklin’s mistakes Although Franklin’s situation is unfortunate, you can learn from her mistakes by beginning the estate planning process now. It would’ve been helpful if Franklin had a will, but even with a will, her estate would still be subject to probate and open to the public. To keep everything private and out of court altogether, Franklin could’ve taken her attorney’s advice and created both a will and a trust. And within a trust, she could have created a Special Needs Trust for her child who has special needs, thereby giving him full access to governmental support, plus supplemental support from her assets. This would have avoided the need for a court to be involved in creating that trust.
While trusts used to be available only to the mega wealthy, they’re now used by people of all incomes and asset values. Unlike wills, trusts keep your family out of the probate court, which can save both time, money, and a huge amount of heartache. Plus, a properly funded trust (meaning all of your assets are titled in the name of the trust) keeps everything totally private.
Trusts also offer several protections for your assets and family that wills alone don’t. With a trust, for example, it’s possible to shield the inheritance you’re leaving behind from the creditors of your heirs or even a future divorce. Moreover, trusts also offer protection if you become incapacitated and are no longer able to make decisions about your financial and healthcare needs. Using a trust, you can appoint someone of your choosing (not the court’s) to handle your financial affairs if you’re unable to do it. With only a will in place, your family would have to petition the court to appoint a conservator or guardian to handle your affairs, which can be costly, time-consuming, and stressful.
Finally, if you have a child with special needs like Franklin did, a Special Needs Trust can prevent your child from losing eligibility for important government benefits, like Medicaid and Social Security. A Special Needs Trust—also not subject to probate—allows you to contribute funds for your child’s care without disqualifying them for these benefits. Don’t wait another day Regardless of your financial status, planning for incapacity or your eventual death is something that you should immediately address, especially if you have children. You never know when tragedy may strike and by being properly prepared, you can save both yourself and your family massive expense and trauma. Don’t follow in Franklin’s footsteps; use her death as a learning experience. Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, meet with us. If you already have a plan in place, we can review it to ensure it’s effective and up-to-date. Contact us today for more information—we promise to make it easy.