On August 16, 2018, Aretha Franklin passed away at the age of 76. Fans and supporters alike were understandably shocked and saddened by the news. What is equally as shocking, however, is that Aretha Franklin passed away “intestate,” meaning that she did not have any estate planning in place at the time of her death. Unfortunately, this means that her loved ones and assets, which were valued at around $80 million dollars, were left unprotected.
While this statistic may be surprising, in reality, it has been reported that sixty percent of Americans pass away without an estate plan. Let us share with you some of the negative effects that Aretha Franklin’s lack of planning has on her estate and loved ones, so you can make an informed decision about the type of planning your family needs.
1. Her children have no guidelines for handling her estate.
One of the main benefits of setting up a last will and testament or a trust agreement is that you have the opportunity to leave instructions in regard to your asset distribution. Think about how you want to establish your legacy. Would you like some of your funds to go to a special charity? Do you want your children to have cherished family heirlooms? These are questions that will not be resolved if you die without an estate plan, and are left to your loved ones and the courts to decide. This can, unfortunately, place a burden on your loved ones to consider how you would want your assets distributed and could lead to arguments among family members.
2. Her special needs child remains unprotected.
Do you have a special needs child who requires a special type of care? If you do not create provisions for your child’s needs in an estate plan, he or she will be unprotected in the event of your death. By establishing a special needs trust, you can ensure any government benefits your child receives are preserved and can help protect your child’s inheritance. You can similarly leave behind funds allocated to your child’s care and individual needs.
3. Her estate has been opened up to potential estate tax liability.
If you pass away with total assets above the estate tax limit, your estate is liable for an additional forty percent tax on any money over $5.46 million per individual. This means that you can leave up to $5.46 million to your heirs without being subject to a federal estate or gift tax. We know that this is a large amount of money that most of us do not have. It is, however, an important tax to be aware of when you are establishing your estate plan.
We know that this article may have raised more questions than answers for you. We hope, however, that this article shows you why it is crucial that you plan ahead. Do not wait to contact us with your questions or if you are ready to create the estate planning that you and your loved ones need.