Probate Administration will be necessary to distribute Aretha Franklin’s estimated $80 million-dollar estate. While the world mourns the loss of a musical legend, the Queen of Soul reportedly died “intestate,” which means she did not have an Estate Plan, Living Trust or Will in place at the time of her death according to court documents obtained by TMZ.
Franklin, who passed away August 16th after a lengthy battle with pancreatic cancer, is survived by her four sons. According to Michigan State Law, her estate will now be divided up and shared equally between her four sons.
Aretha Franklin Was Advised to Create an Estate Plan
According to the Detroit Free Press, Don Wilson, an attorney who worked with Franklin for years, urged her to create a will or Living Trust. With a proper estate plan in place, the distribution of the singer’s assets would have remained private and process not left to the discretion of Michigan Probate Law.
According to our Estate Planning Attorney Mike Abrate, “A detailed estate plan that includes legal tools like a will and trusts, ensure that your assets are distributed as you wish. When created properly, they allow your loved ones and beneficiaries to minimize or avoid the probate process, limit the effects of estate taxes, and remain private.”
What Having No Estate Plan or Will Means Beneficiaries
For Franklin’s four sons, her passing without a will, Living Trust or estate plan will now require a lengthy probate process. As with all court proceedings, fees and other costs will also be charged to the estate. Franklin’s niece, Sabrina Owens, has petitioned the court to appoint her as the personal representative (also referred to as the estate administrator) of the estate according to court documents. If granted, Owens may be entitled to an estate administrator fee. With the high value of the estate, an experienced probate attorney will likely also be needed by the family who will also be entitled to fees for their legal services. The total amount of fees varies from state to state.
Example of Estate Administrator and Probate Attorney Fees
Each state has different guidelines for fees a probate attorney and/or personal representative can be entitled to. In California, these fees are established according to the California Probate Code sections 10810 and 10811. According to Albrate, if Franklin’s probate administration would have been filed in California the estimated fees would be something along the lines of the information provided below:
- 4% of the first $100,000 = $4,000
- 3% of the next $100,000 = $3,000
- 2% of the next $800,000 = $16,000
- 1% of the final $7,000,000 = $70,000
Total fees for each the probate attorney and personal representative: $93,000 or $186,000 total.
In addition to these fees, Franklin’s estate could also be subject to additional court filing and administrative fees, appraisal fees, and other various costs or fees.
Contesting the Estate Could Bring More Complications
Complications to the probate administration can arise when there is no will according to our estate planning attorney Dan Olsen, “Especially when there are large amounts of money at stake, like in Mrs. Franklin’s estate, (unfortunately) there are often individuals who contest the estate.” With a lack of estate planning or a “proven will,” a court battle from creditors or extended family members could result. Olsen further elaborated, “It is not uncommon for a probate court to be convinced, even with an outdated or poorly constructed will, the deceased person would want their assets distributed in a way other than an outlined in the will, or as the law stipulates.”
At this time there is no indication that Franklin’s estate would be contested. However, even her long-time attorney acknowledges, “Any time they don’t leave a living trust or will, it always ends up being a fight.”
Special Needs Trust Could Have Helped Oldest Son
Franklin’s oldest son Clarence has special needs and will require financial and other forms of support his whole life. “This is a perfect example of how estate planning tools, like a Special Needs Trust, could be effectively used to provide for a child.” Abrate noted when asked about Franklin’s son. “With a Special Needs Trust, Franklin could have specified exactly how assets from her estate should be distributed for the care of her son.”
Dying Without a Will Is Not Uncommon
Franklin is not alone when it comes to dying without a will. According to the AARP, 42% of the Baby Boomer generation, 64% of Generation X, and 78% of millennials either do not have a will or estate plan in place. Olsen pointed out, “We constantly hear from people who have yet to establish an estate plan they have either ‘not gotten around to it yet’ or they ‘don’t have enough assets to leave anyone.’ However, a well-constructed estate plan provides so much more than the distribution of assets.” An estate plan will not only direct the probate court in the distribution of your estate, it can include:
- An Advanced Health Care Directive that details your wishes for health care should you not be able to make decisions for yourself.
- Durable Power of Attorney that provides a representative you choose to make decisions for you if you are unable.
- Appointment of a guardian to care for young children in the event of both parent’s death
“It is not uncommon for people to not want to think about the end of their lives” says Abrate. “We all want to think that death is something in the future and can be addressed later. But the fact is, with forward planning, you can help ease the stress of your loved ones during an emotional time.” For most Americans, developing a well-crafted plan with an experienced estate planning attorney is much simpler and cost effective than they envision. “Many of our clients are surprised to learn we can provide an estate plan that is customized for their needs for as little as $1,500. We meet with you to understand your unique situation, needs and goals. Then we guide you through the process and legal documents you need to achieve them.”