The recent passing of Aretha Franklin on August 16 means the music industry has lost yet another icon. It also, however, serves a useful reminder – even those who appear to have all the financial success in the world, don’t necessarily ensure their financial affairs are in order.
Shortly following the death of Franklin, the world learned she died without a will. See Article. This was despite the fact that her net worth was estimated to be roughly $80 Million, she had four children and she also knew her demise was coming, given she suffered from advanced pancreatic cancer. As a recent posting notes: “It’s not known for sure why Franklin died “intestate” (without a will), but it is known that she’s leaving a hefty amount of assets behind… .” The article then goes on to ask the all-important question – “But without a will, where will Franklin’s assets and money go?”
The answer to this question depends on the statutory rules applicable in the relevant jurisdiction. If this were in Ontario, given Franklin had no spouse but four children, her estate would be divided equally among her four children. If she also had a married spouse, then her estate would be divided such that her married spouse would get a portion and her children would share a portion. If, however, her spouse was a common law spouse, then s/he would not be entitled to any part of the estate.
In Franklin’s case, a distribution among the four children may not sound so bad and likely in accordance with what Franklin would have done had she have had a will. Unfortunately, the lack of a will will have other unintended implications such as:
- There is no one with legal authority to do anything on behalf of the estate. Depending on what the assets are, this could have profound implications, like an inability to sell assets in a declining market, or more simple implications, like an inability for someone to redirect Franklin’s mail. This will undoubtedly cause more stress on surviving loved ones and likely more expenses of administration.
- Lack of tax planning, which may mean more money is being paid out in taxes than needed to be, meaning less for the beneficiaries.
- Lack of planning for family members with special needs or circumstances. For instance, an inheritance for a minor would need to be paid into court. In Franklin’s case she has a son, Clarence, with special needs, who will need financial and other support for the rest of his life. See Article. Unfortunately, it is likely that other court proceedings may be needed to deal with Clarence’s share in a manner that is appropriate for his circumstances.
Ultimately failing to have a valid will to deal with the disposition of one’s estate may mean benefitting the wrong persons, at the wrong time and in the wrong manner, imposing additional taxes and expenses on the estate and ultimately disarray and potential risk in the immediate aftermath of death while there is no one with legal authority to act for the estate.
The upshot is – while the world has lost an exceptional music icon, her death without a will can serve as a reminder to all of us to ensure our affairs are in order.