Aretha Franklin and Prince were undoubtedly brilliant performers, but they made giant estate planning mistakes that you’ll want to avoid. Franklin, who was divorced, reportedly died without a will or a trust despite having four grown children, one of whom (Clarence, 63) has special needs. Prince, too, died without a will.
Following in their footsteps could mean your loved ones won’t receive the inheritances you intended; disbursements could be long-delayed; ugly family squabbles may ensue; your estate might owe additional taxes and your financial life will become a public record. If you, too, have a special needs child, he or she may wind up losing some government benefits.
Many Americans Don’t Have a Will or Trust
Sadly, many Americans don’t have a will or a living trust. A 2017 survey by Caring.com found that only 4 in 10 adults do. A striking 64% of Gen Xers and 42% of boomers don’t have a will, the study noted. The top reason for not taking these fairly simple estate-planning steps, according to survey respondents: they “hadn’t gotten around to it.”
Now you may not have anywhere close to Franklin’s reported $80 million estate. But the actual dollar value of your assets isn’t the point. It’s about making sure your loved ones receive what you want the way you want.
What Happens When There’s No Will
If you don’t have a will, your estate will — like Franklin and Prince — wind up in probate court, which means it will become public for anyone to see.
In Franklin’s case, but probably not yours, the federal government will take a big bite, too. There’s a 40% estate tax on an estate’s assets over $11.18 million (the exception to this: money or assets left to charity). If Franklin’s estate truly is worth $80 million, the Internal Revenue Service will receive $27.5 million.
And, as Greg Iacurci of InvestmentNews recently wrote, without a trust established by a will, Franklin’s assets could be taxed again by the federal government at the time of her kids’ death.
What Aretha Franklin’s Lawyer Said
Franklin’s lawyer, Don Wilson, said he tried to get her to create a will or trust to keep her estate private and out of probate. She never followed through.
“I just hope [Franklin’s estate] doesn’t end up getting so hotly contested. Any time they don’t leave a trust or will, there always ends up being a fight,” Wilson told The Detroit Free Press.
Find a Local Attorney, Get a Will (and maybe a Trust) Drafted
If you don’t have a will, get one drawn up immediately. It might cost you over $1,000, depending on its complexity. And although you can do this yourself with online forms, we recommend springing for an estate lawyer to handle the job. That will help ensure your wishes will be carried out and that the will is fully legal.
You might also want to create a revocable living trust, which will be private. This won’t save you taxes, but it allows you to avoid probate and easily change your plans for the disposition of your assets while you’re alive.
There are many reasons why you want to hire a professional attorney to draft your estate planning documents. Contact William K. Hayes, an estate planning expert with over 44 years of experience to schedule your initial consultation TODAY: 626-403-2292.