The Queen of Soul, Aretha Franklin, died on August 16th at the age of 76. Ms Franklin won 18 Grammy Awards and had more than 100 singles on the Billboard charts. She also amassed a personal fortune estimated to be worth $80 million and died without a will.
If Ms Franklin died in Ontario, in order to administer her estate someone would need to apply to be her executor, and estate administration tax would be payable on the value of her overall estate. Estate administration tax is approximately $15,000 per million dollars, and for an $80 million estate, this would amount to $1,199,500.00 in estate administration tax.
Not leaving a will can also have other undesirable consequences. Notably, when one dies without a will (which is referred to as “intestate”) the distribution of their estate is governed by the legislation where they resided. This distribution may not be what the deceased would have wanted. For instance, in Ontario if one dies without a will (with an estate over $200,000) their estate is distributed as follows:
- If there is a surviving spouse and no children, the entire estate will go to the surviving spouse;
- If there is a surviving spouse and one child, the spouse will receive $200,000, and the remainder of the estate will be split between the spouse and child. If there were a spouse and two children, the spouse will receive $200,000 and one-third of the remaining estate, and each of the children will also receive a third of the estate; and
- If there is no spouse or children, the deceased’s parents would inherit equally.
Additionally, when one dies without a will there is no one with legal authority to do anything on behalf of the estate. Depending on what the assets are, this could have considerable financial implications such as the inability to sell the deceased’s property in a declining market. There is also a missed opportunity to do any tax planning which would save taxes payable on death, or planning for certain family members who are minors or have special needs.
Other notable musicians have made the same mistake as Ms Franklin. Ike Turner died without a will nearly 11 years ago and his estate is still in litigation among family members. Prince also failed to leave a will resulting in legal disputes regarding the rights to his music, as well as his sister and five half-siblings being named as beneficiaries of his estate by the court, even though one of the half-siblings hadn’t spoken to Prince in over 15 years.
In death, these music legends have highlighted the importance of not putting off your estate planning for another day.