Unfortunately, the estate plan of the “Queen of Soul” continues to make headlines! While many headlines continue to sing her praise for the legacy she left for songs like Rock Steady and Respect, others talk about the failure of her estate plan.
Aretha Franklin’s estate plan is no secret now. At first, many predicted that her lack of planning had been misreported. How could a woman with such a successful career, high net worth, and large family, fail to plan? What we have learned, however, is that these reports were not incorrect.
Right now, research tells us that less than half of American adults have an estate plan. This continues to be a disturbing statistic in light of the importance of estate planning for each of us. What could an estate plan have accomplished for Aretha Franklin? Let us share several critical lessons here with you.
- Plan to protect your disabled child. Aretha Franklin left behind four sons. One of her sons has been confirmed to be disabled. Unfortunately, an inheritance can disqualify the disabled individual from receiving valuable government benefits such as SSI and Medicare. Through estate planning techniques, such as a special needs trust, a disabled beneficiary can safely inherit.
- Avoid costly federal estate taxes. Although the estate tax limit has continued to rise, it still exists. It is important to plan for taxes in life and in death. Due to a lack of planning, Franklin’s estate will have to pay millions in federal estate taxes. No matter what your net worth, bear in mind that the tax laws can change at any time and estate taxes should be a part of your comprehensive plan.
- Lifetime documents matter. Right now what we are hearing most about is the lack of dispositive planning for Franklin’s estate. What no one is focusing on is how unprotected she was during her lifetime. While creating a last will and testament and a trust agreement is important, equally important is to ensure you are protected during life with documents such as a durable power of attorney. Advanced directives, such as the durable power of attorney or living will, ensure that should you become incapacitated there is a person with legal authority to make decisions for you.
These are just a few of the lessons we can take from the late Aretha Franklin. We know that this article may raise more questions than it answers for you. We encourage you to reach out to us and schedule an appointment to discuss them.
