Over the last couple of months, we lost two American entertainment icons: Aretha Franklin and Burt Reynolds. Franklin’s musical talent made her one of the best-selling and most critically acclaimed musical artists of all time, with more than 75 million records sold worldwide, earning her the title of “Queen of Soul” and definitely earning our R-E-S-P-E-C-T (you’re welcome for now having that song in your head). While Reynolds may not have been the most critically acclaimed actor, he did have great commercial success in the box office and on the small screen with arguably his most iconic role, Bandit in Smokey and the Bandit, permanently embedded in the popular culture of the 1970s. While they both lived lives in the spotlight, in their deaths we see a big difference.
Like many other celebrities (Prince, Farrah Fawcett and James Brown to name a few), we now know that Franklin died without a will or trust in place. Some experts have estimated her estate to be worth approximately $80 million, with the possibility of it being worth even more depending on how her intellectual property (copyrights, licensing, etc.) is valued.
With an estate this size, one wonders why she didn’t have an estate plan to manage the complexities and uncertainties her family now faces. If nothing else, the tax liabilities of an estate this size would typically motivate a person to put a plan in place to at least reduce — if not completely eliminate — estate, inheritance and income taxes. When Franklin sang that iconic line “I’m about to give you all my money,” she might as well have been talking to the government about the enormous tax she was going to owe!
Franklin was single at the time of her death, so her four sons are equal heirs to her estate. Her niece has been appointed by the Court as executor. Early reports say that her longtime companion and her sons are taking adversarial positions against each other regarding how her estate should be divided. Franklin was known for being a private person when it came to her finances, but now, much of this information will be available for the world to see as the parties work through dividing her estate. Even if she had had a will or trust, there is certainly no guarantee that her family would not be in court, but these testamentary documents would certainly stand as a clear expression of her desires and would reduce the chances of disputes arising. Now, it will be up to the court to determine the best way for her estate to be decided.
What about Reynolds? While by his own admission, he earned and lost a fortune during his lifetime due to a couple of divorces and poor business decisions, he did apparently have a very well thought out plan as to what would happen to his assets when he died. In his last will and testament, he states he intentionally excluded his only son from the will. While at first this might sound harsh, Reynolds explains in his will that he did this because he had already provided for his son by other means. Apparently, Reynolds had a trust — a private document — already in place for the benefit of his son. By choosing this method of planning, it’s highly unlikely his assets will be fully known, and his son’s privacy is protected (trusts are often utilized in Florida due to the state’s unique probate rules). So just like the Bandit tried to avoid the governmental authorities in the movie, Reynolds, by careful planning, has minimized the court’s involvement with his family and his estate.
So what do these celebrities’ estates have to do with us who aren’t celebrities with vast fortunes? Statistics show the majority of Americans are like Franklin — no will or estate plan in place. While many of us think we do not own enough possessions to do much planning, the reality is we will all own something at our death — fortune or not — and not having a will creates all kinds of issues for family and friends. When a person dies without a will, the court decides on how estates will be divided — not according to the desires of the person who died (since there is no Will expressing those desires), but according to the default laws of the state. The court chooses who will administer the estate, even if the person who died knew who would do the job best. The court decides who will care for minor children as well.
Like Franklin’s estate, which may become tangled in litigation and discord for years to come, the estates of regular people are likewise ensnared with conflict and tension every day when the deceased person made no thoughtful provisions for his or her estate upon death.
By contrast, in estates like Reynolds’ in which a person has established a will or trust, there is certainty and peace of mind. Everyone knows who will be the executor. They know how the estate will be divided. A guardian who shares the values of the estate’s owner can be appointed to care for minors. Appropriate plans are made to accommodate complicated family situations (i.e. blended families, heirs with special needs, heirs with personal issues, etc.). An estate with a will or trust is not guaranteed to be free of all turmoil and conflict, but the problems are certainly reduced.
When asked why Franklin had no will, her attorney commented that he had talked to her for years about putting something in place, but she just never “got around to it.” So often when I meet with families after the death of a loved one, they respond the same way: “We talked about it, but never got around to doing it” or even, “We didn’t know where to start.” As that person’s estate is administered, the results are much different than what close family members know that the deceased person wanted; however, nothing is enforceable since these intentions were never formulated legally.
Thinking about developing and implementing an estate plan can seem overwhelming, and it normally takes some time as you consider all the things that must be evaluated in planning an estate. This is where an estate planning professional, like a lawyer, accountant, or a friendly estate planner with the Tennessee Baptist Foundation can help you begin the process and guide you through it. These advisors can help you consider all the facets of your life in light of your desires for your estate and advise accordingly regarding the best way to plan your estate.
To quote the great theologian Jerry Reed in the Smokey and the Bandit theme song, you may feel like you have “a long way to go and a short time” to get to planning your estate, but the key is to get started. Take one step forward today and know you’re on your way to a well-planned future for your family.
Ready to get started?
You can reach us via phone at (615) 371-2029 or fill out this form.
Please note that the advice offered in this article is not intended to be construed as tax, legal or accounting advice. This material has been prepared for general informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice for the reader. You should consult your own tax, legal and accounting advisors before engaging in any transaction.