written on behalf of Feigenbaum Law
The death of Aretha Franklin, the Queen of Soul, rocked the music world last year. As the world mourned the loss of this legendary singer, a legal storm brewed when it initially seemed that she had not left a will or trust delineating what was to happen to her more than $80 million fortune. In the months following her passing it seemed as though the artist’s four sons would be locked in a protracted and emotional legal dispute over their mother’s estate- which is often what happens when a family member fails to have an estate plan in place.
However, documents have recently surfaced which actually do lay out, in detail, what is to happen to Ms. Franklin’s estate.
This week we explore two sides of this issue: what would happen if these documents had not been found, and, now that they have, where does the family go from here?
Unique Factors for Musicians to Consider in Estate Planning
According to news reports following her death, Ms. Franklin’s entertainment lawyer repeatedly asked her to think about the future and put together a trust while she was alive, noting that “it would have expedited things and kept them out of probate, and kept things private.”
A complicating factor in Ms. Franklin’s case was the dollar value of her song catalogue, something that should have been managed for copyright and related issues as part of a broader estate plan while she was still living. For music artists, their ownership over their song catalogue, and therefore their ability to make royalties every time their song is played or, in the digital age: streamed, can prove to be one of the most valuable aspects of their estate.
The Implications of Dying without a Will
Legally, if someone dies without a will that person is deemed to have died “intestate”. This raises a number of legal questions and, more often than not, causes complications.
Under Michigan law, where Franklin was living at the time of her death, the assets of a deceased person who is unmarried and dies intestate are divided equally among that person’s children. Since it was believed that Ms. Franklin died without a will, her assets would be divided equally between her four sons.
This would not preclude others (including extended family members or creditors) from contesting the estate.
New Documents Discovered: Now What?
Earlier this month, several handwritten wills were discovered in a locked cabinet and under the sofa cushions in Ms. Franklin’s home in Detroit. These have been submitted to a probate judge to determine whether or not they qualified as valid documents. The discovery of these documents, and the court’s ultimate decision with respect to their validity, could impact what will happen to Ms. Franklin’s estate.
The most recent of these documents is dated 2014. The New York Times is reporting that two of the four sons support this 2014 will, while two oppose it.
Ms. Franklin’s eldest son, who was born when Ms. Franklin was 12 years old and currently lives in a group home, has opposed the 2014 will. He would inherit significantly less if the 2014 will is to be found valid. The will does further state that the other three sons are to “oversee his needs” and check in on him once a week. However, the legibility of the handwriting in this part of the will is difficult to fully decipher.
If this will is not recognized, the eldest son will receive ¼ of the estate (his equal share under Michigan intestacy rules).
The 2014 document also names Ms. Franklin’s youngest son as executor of the estate, which would oust Ms. Franklin’s niece from that role (she was appointed as executor by a court last year with the unanimous support of all four of the sons). Under the 2014 will, the niece would receive an inheritance of $200,000 but lose her function as the estate’s primary administrator.
If the 2014 will is recognized as valid, a settlement among the sons and other interested parties may be required in order to avoid subsequent legal challenges and to simplify management of the estate.
At a recent closed door meeting, a property sale was allegedly discussed, and a mediator was suggested to help the parties reach a conclusion without the need for expensive litigation. We will continue to follow developments in this matter and will provide updates when they become available.
Important Things to Know
State taxes can be a huge liability if you are not properly prepared. For example, if you are a Canadian who owns property in the United States but you are not a U.S. citizen or resident, the IRS will tax your estate 40% of the fair value of the property.
A knowledgeable tax lawyer can assist you in assessing the available options. Estate tax issues can be hugely complex and burdensome. We know how to handle these issues well and are routinely sought out by clients, their counsel and other professionals for security in minimizing tax exposure.
How Can We Help?
At Feigenbaum Law we regularly prepare U.S. Estate tax returns (Forms 706/706NA) and are routinely consulted by other accountants, lawyers, insurance professionals and financial planners to assist their clients on estate planning or post-mortem tax advice.
Estate tax issues are not something you should be facing without the assistance of a professional who has a comprehensive and authoritative knowledge of the area. Contact Feigenbaum Law about minimizing both your tax exposure and that of your heirs. We offer services to clients in the US, Canada and around the world.
At our goal is to create the best tax and estate strategy possible for our clients. We work with you to create a personalized solution that will streamline your compliance requirements and set you up to take advantage of all possible current and future opportunities to reduce your tax burden. Contact us to learn more about how we can help or call us at (416) 777-8433