Aretha Franklin, The Queen of Soul, died on August 16th at the age of 76 – she did not leave a will detailing her wishes for her assets. What happens next to Ms. Franklin’s estate and what can WE learn from it? Certified Financial Planner Paul Fain joins us again to look at your Sunday Money.
PAUL, I ASSUME THAT ARETHA FRANKLIN HAD A SIGNIFICANT ESTATE RIGHT?
- The Queen of Soul was worth an estimated $80 million.
- She left behind four sons.
- Dying without a will is called “intestate.”
SO WHAT DOES THIS MEAN FOR HER ESTATE, HOW WILL IT BE HANDLED?
- Michigan law prevails
- Probate court.
- Public process.
- The court appoints an Administrator.
- Sons should be equal heirs.
WILL THERE BE SIGNIFICANT ESTATE TAXES DUE?
In the absence of any estate planning, such as trusts or charitable tools, the taxes will be huge.
- $11.2 million estate exemption
- $80m – $11m = possible $69m taxable estate
- 40% top estate tax rate
- Possible estate tax due, $25 million or more
WHAT CAN WE LEARN FROM THIS SITUATION?
- Over half of U.S. adults currently do not have a will or living trust in place.
- Have an estate plan reduces the risk of family strife.
- YOU name an administrator, heirs, guardian, trustee, etc.
- Can quicken the distribution process.
- Possible privacy.
Quoting Aretha, “You better think!” (and plan your estate).