Like Prince, Bob Marley, Princess Diana and Pablo Picasso before her, Detroit’s Aretha Franklin died intestate last month. Here in Michigan, dying “intestate” means that you die without a will, trust, or other estate planning instruments.
What happens when you die without an Estate Plan?
If you die and have not put an estate plan into place, then your assets must be probated in the county probate court where you die. Unless your assets are probated, they cannot be sold or otherwise disposed of following your death.
In the case of Ms. Franklin, her estate is estimated at over 80 million dollars. She has four adult children; all “interested parties” under Michigan’s probate code. One of her sons has “special needs”.
Now, Ms. Franklin’s assets will be disclosed and on public display. How, and why? Because she has died without a will, an estate has been opened by Ms. Franklin’s niece in the Oakland County Probate Court and assigned to Judge Jennifer Callaghan.
One of the key documents in an estate filing like the Queen of Soul’s is the estate “inventory”. This public document will list all of Ms. Franklin’s known assets; each asset will be assigned a value.
Pursuant to Michigan’s probate code, known as the Estates and Protected Individuals Code or EPIC, a decedent’s children are considered “heirs at law”. They will take equal shares of their famous mother’s estate, after all creditors have been satisfied.
Another aspect of a decedent’s probate estate is that creditors may file claims against the estate for moneys due and owing. This wreaks havoc on the decedent’s privacy and causes undue stress for surviving family members.
Components of a good Estate Plan.
You do not need to be wealthy to benefit from an estate plan. Most good estate plans will include: a trust, a power of attorney -both medical and financial- and a “pour over will” among other documents.
A trust is beneficial to the extent that it keeps a decedent’s business out of the probate court and away from the eyes of the public. For example, if Ms. Franklin had died with a trust in place, then no decedent’s estate would have been filed.
The trust is the document that lays out the decedent’s [also known as the settlor’s] intent relative to the objects of their bounty, i.e. their assets. A “pour over” will is used to ensure that all the decedent’s assets eventually make it into the trust.
Without a public decedent’s estate, with its attendant inventory and creditors’ claims, the world could be kept from gawking at Ms. Franklin’s assets. Also, a proper estate plan usually minimizes challenges among family members.
Best Practices for an Estate Plan
So what steps should the Queen of Soul taken to put a proper estate plan into place? First, research local estate planning lawyers; speak with trusted family or friends that have estate plans to get a referral. Or do some basic research on the Internet.
Second, think carefully about the disposition of the objects of your bounty and who you want to be in charge of executing the estate plan. These important decisions will not be left to the intestacy provisions of EPIC. Rather, they will be spelled out in your trust and other estate planning documents.
Third, be sure to alert family members you have nominated to serve as a fiduciary upon your death. Also be sure these family members know where to find your estate planning documents.
We Can Help
If you or a family member would like to learn more about estate planning, give our law firm a call. We offer a free consultation to explore your estate planning options.