When news broke this week that “Queen of Soul” Aretha Franklin died without a will or a trust, it was dèjá vu.
Two years ago, pop star Prince left his heirs in the same lurch. Other famous people who died intestate (without a will) include singer-songwriter-congressman Sony Bono, artist Pablo Picasso, guitarist Jimi Hendrix and billionaire business mogul Howard Hughes, to name a few.
Martin Neumann, an estate planning attorney at Los Angeles-based law firm Weinstock Manion, isn’t too surprised that Franklin didn’t write a will. Many people superstitiously think, “If I do it, I’m going to die the next day,” he said, or they plan to get around to writing a will but never do
Perhaps Franklin, like many individuals, couldn’t decide how to split her assets among her children, said Neumann. According to the Detroit Free Press, her four sons filed documents in a Michigan probate court on Tuesday, and one son asked the court to appoint Aretha’s niece as the personal representative of the estate.
Generally, without a will, “there’s going to be some time and money thrown away to determine who’s ultimately going to handle the estate,” said Neumann. It might cost a little more to have Aretha’s estate probated than if she’d put it in a revocable trust, he said, and she might’ve been able to take steps to minimize her estate taxes had she planned during her lifetime. But at the end of the day, under Michigan law, Aretha’s estate will pass equally to her four children, he said.
People who wish to have their estates settled in an orderly way and want to avoid fights among family members should, at minimum, have a will, said Neumann. They should also consider putting their assets in a revocable trust, he said—especially if they live in states where probate proceedings are complex and expensive.
When the holder of a revocable trust dies, someone else takes over as the trustee, the assets remain titled in the name of the trust and probate is avoided. “It just saves a lot of time, a lot of money and a lot of aggravation,” he said.
In California, attorney and executor fees on a $1 million estate can each run $23,000, he said, and hit $113,000 apiece on a $10 million estate. He noted that residents of states where probate is inexpensive and revocable trusts are uncommon (such as New York and Texas) should put property they own in costly probate states (such as California or Florida) in revocable trusts because real estate must be probated where it’s located.
Naz Barouti, an estate lawyer, media commentator and president of Barouti Law Corp. in Los Angeles, is somewhat surprised Franklin didn’t push herself to address her estate planning issues considering she was older, she had pancreatic cancer and she had four sons. Barouti was less surprised with Prince, who was younger and childless.
Anyone who starts acquiring wealth, whether or not they have kids, should think about estate planning, said Barouti. She even thinks it’s important for everyone, having recently seen many young adults over age 18 become incapacitated without having a power of attorney or a health-care directive.