Aretha Franklin, the Queen of Soul, died without a will. Papers have already been filed in court by Franklin’s four sons and niece. That means there will be public proceedings. There could be court battles too, depending on who claims what. Unexpected celebrity deaths can make the rest of us think about what documents we need to have in place. The tax and financial hassle of probate or intestacy can be huge, even for normal sized estates. When you add the extra zeros that go with a successful entertainer, the failures can seem much more palpable. Franklin is not the only star who neglected estate planning. In 2016, Prince died without a will, echoing estate planning gaffes by Philip Seymour Hoffman, James Gandolfini, Amy Winehouse, Heath Ledger, and others. All of these celebrity estates had issues of one sort or another.
Franklin had been ill, so writing a will would have been logical. But even people with Wills do not always think through the tax and other implications. For example, Seymour Hoffman had three children with Marianne O’Donnell, but the couple never married. Plus, he mentioned only one child in his will, not all three. Like Prince, Amy Winehouse didn’t have a will. That means we do not know what either one of them would have wanted to have happen to their assets. Amy Winehouse’s parents inherited her estate, while her ex-husband got nothing.
Heath Ledger had a will, but it was five years old. It gave his parents and sisters his $20 million estate, failing to mention Michelle Williams or their child. And after James Gandolfini died at 51, reports said his will clumsily sent $30 million of his $70 million to the IRS. The stories should make tax advisers and estate planners cringe.
What happens on your death isn’t an easy subject for anyone to discuss. But a few key points about Aretha’s Franklin’s situation deserve mention. A will would have been clear as to what she wanted, but a will is public. There is no reason the public has to know about who you benefit and who you may disinherit. Probate is public, expensive, time consuming and unnecessary. It is even worse not to have a will. With no will, the state has to decide who gets what, usually be statute. It is far better to make those decisions yourself. A will would have been simple and better. The simple way to keep it private?
Use a revocable trust. For very little money you can create a revocable trust that calls for the disposition of your assets. You still write a will. But the will just says that everything you own goes via the revocable trust. It’s called a pour-over-will, since it pours all assets into the trust. The trust is private. Using a trust does not necessarily mean saving taxes. No one wants to pay taxes unnecessarily, but you first want your assets to go how you want them to go. That can change frequently during life. Another advantage of a revocable trust is that you can change it easily at any time.