The death of Aretha Franklin at the age of 76 saddened music fans throughout Nevada and the rest of America. Her passing also revealed that she did not prepare a will or any kind of estate plan. With an estimated fortune of $80 million, which includes illiquid assets like song copyrights and future royalties, her heirs will very likely owe the federal government 40 percent estate taxes on the portion of the fortune that exceeds the exemption of $11.18 million. The Internal Revenue Service will expect this tax payment within nine months.
Franklin’s four children have put themselves forward as potential heirs. Because the singer left no estate plan, all decisions about the distribution of the state fall into the hands of the local probate court. The attorney who represented Franklin said that he urged her many times to set up a trust, but she never followed the advice.
Another estate attorney commenting on the situation explained that estate planning could have arranged for liquid assets to cover the estate taxes. Franklin might have reduced the tax bill as well by gifting funds to her heirs and giving to charities to reduce the size of her estate while she was still alive. He added that a trust to hold funds for heirs would have protected the assets from any divorce proceedings or creditor claims that might arise.
A person who wants to control the distribution of an estate could work with an attorney familiar with the estate planning process. Legal counsel could explore tax issues and how to structure the terms of a trust to protect heirs from creditors.