Few people would be unaware that Aretha Franklin died recently and that fans the world over have mourned someone who was acclaimed as a master of her art. Unfortunately, something that Aretha did not master was proper estate planning. It has been widely reported that she did not leave a Will despite advice from her attorney and repeated attempts by him to have her set up a Will incorporating Testamentary Trusts to give effect to her estate planning wishes.
Accordingly, an application has been made in the Oakland county Probate Court by Aretha's four sons all claiming to be interested parties in the estate. Aretha's niece has been listed as the personal representative of the estate.
In Michigan, where the case is to be heard and where Aretha resided, there are laws governing who inherits property when an individual without a spouse dies without leaving a Will.
We have similar provisions in NSW and the effect of the order of intestacy set out in the Succession Act (NSW) is set out below:
- Your Spouse. If you have a spouse (including defacto) and no children, the spouse will receive the entire estate (after liabilities are finalised).
- Spouse & Children. Your spouse will take the whole estate if you leave no children. If you do have children who survive you and are all children of your spouse, your spouse is entitled to the whole estate.However, if your children are not children of your spouse, your spouse receives the personal effects of the deceased, a statutory legacy and one half of the remainder of your estate, if any.
- Children. If you have children and no spouse, your estate will be held for the children equally.
- Parents. If you have no children or spouse then your estate will pass to surviving parents equally.
- Other Family. If you have no parents alive, your estate will pass equally to brothers and sisters and if there are none, to grandparents and if there are none alive then to uncles and aunts.
- The Crown. In the event that you die with no will and have no living relatives as outlined, then your estate will pass to the Crown (in NSW the State Government).
The difficulty faced in Aretha's case is that the events will now play out in a very public arena and one that is likely to be extremely costly for the estate and all participants. This could have been avoided by the simple expedient of leaving a valid Will.
Similar considerations apply in NSW. We urge all our clients to ensure that their testamentary plans can be given effect by preparing an appropriate Will or Testamentary Trust and to keep it up to date as family circumstances change.
For more information, please call 9525 8688 or click here to download our Estate Planning eGuide.