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Aretha Franklin's Estate Faces Challenges

On August 31, 2018, musicians, actors, religious leaders and politicians gathered at Detroit's Greater Grace Temple to remember and celebrate the life of Aretha Franklin. Ms. Franklin passed away at age 76 without a will. 

Los Angeles attorney Don Wilson represented Franklin throughout her music career. On several occasions, he urged her to complete a will and living trust but she did not create an estate plan. 

Wilson stated, "It would have expedited things and kept them out of probate and kept things private. I just hope her estate doesn't end up getting so hotly contested. Any time they do not leave a trust or will, there always ends up being a fight."

Franklin's four sons filed documents with the Oakland County probate court and indicated they were "interested persons." One of her sons, Kecalf Cunningham, noted in the filing that Aretha Franklin "died intestate." 

The probate process is now proceeding in Oakland County, Michigan. Franklin owned three homes in Bloomfield Township, Michigan and one home in Detroit. However, the primary value of her estate is her intellectual property. This property includes many recordings, musical compositions and her likeness. 

Franklin was extremely successful and was called the "Queen of Soul." She had over 100 single recordings on the Billboard charts and received 18 Grammy Awards. Her estate property value could be in the tens, or even hundreds, of millions of dollars. 

When Michael Jackson passed away, his estate executors claimed that the estate was only worth a few thousand dollars. However, IRS appraisers valued the estate at $1.1 billion. Understandably, the estate is interested in keeping the valuation low to reduce estate tax while the IRS seeks a large value in order to increase the estate tax. 

Because the Franklin estate is likely valued over the 2018 exemption of $11.18 million and valuation of intellectual property is quite difficult, the four sons are likely to be in a contentious dispute over valuation with the IRS. The valuation contest with the IRS can proceed through the tax and appellate courts for a decade or longer. 

Editor's Note: Franklin's four sons will likely receive creditor claims, contest the estate value with the IRS and negotiate multiple contracts and licenses for Franklin's intellectual property. This process is particularly difficult because there is no will and the property will pass to heirs under Michigan law. Therefore, it may be several years before the Oakland County Probate Court determines the specific shares of ownership for the four sons or other family members. With many millions of dollars in estate value, and millions more owed to the IRS for estate taxes, the potential for intense and protracted conflict is great. A will and living trust by Ms. Franklin could have saved enormous costs and enhanced family harmony.
Al Skorupski, PSP
Planned Giving Coordinator AEMP
(520) 326-0556
plngvg@aemp.tuccoxmail.com