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Estates & Wills & Trusts

Lack of a will could be 'troubled water' for Franklin's beneficiaries

Reports that singer Aretha Franklin died without an estate plan are “shocking” and highlight the need for all people — not just the rich and famous — to make a will, Toronto estates and trusts lawyer Suzana Popovic-Montag tells AdvocateDaily.com.

“It’s surprising because when you think of the main reasons people don’t create an estate plan, cost is typically one of them,” says Popovic-Montag, managing partner of Hull & Hull LLP. “Another reason is not knowing what the consequences are if you die intestate, but at least one of Franklin’s lawyers says he repeatedly urged her to draft a will.”

The Associated Press reports that Franklin, who was terminally ill with pancreatic cancer, died at age 76 without a will. Now her four sons and other family members are left with the task of finding out how many millions she was worth and dividing it up — a process that could take years and is likely to play out in public, the news agency says.

A Los Angeles lawyer who worked on entertainment matters for Franklin for nearly 30 years said he tried to convince her that she should not only create a will but also a trust.

“She never told me, ‘No, I don’t want to do one.’ She understood the need. It just didn’t seem to be something she got around to,” he told the Associated Press.

“We don't have a crystal ball to know when it's too late to do something,” says Popovic-Montag. “Dying intestate can have a devastating impact on the administration of an estate and the lives of surviving loved ones.”

She says people often make assumptions as to who will benefit from one’s estate at death, but seldom does it manifest in the same way one would intend had the time been taken to draw up an estate plan.

In Ontario, Part II of the Succession Law Reform Act (SLRA) outlines the distribution of assets when a person dies without a will.

The general distribution is as follows:

1. If there is a married spouse and no children, the spouse receives the entirety of the estate.

2. If there is a married spouse and children, the spouse receives the first $200,000.00 (or “preferential share”) of the estate before the residue is divided. If there is one child, the residue is paid out to the spouse and the child equally. If there is more than one child, the spouse is entitled to one-third of the residue, and the children share the other two-thirds equally.

3. In the absence of a spouse, the entire estate goes to the children equally.

4. If there are no children, the estate goes to the deceased’s parents equally.

5. If no parents, the estate goes to the deceased’s siblings — if a sibling is pre-deceased, then to the deceased sibling’s children.

6. If no siblings, the estate goes to the nephews and nieces.

7. If no nephews and nieces, it goes to the next of kin of equal degree of consanguinity.

8. Only if there is no next of kin will the residue of the estate becomes property of the Crown.

Even if a person is OK with the distribution scheme set out in the SLRA, Popovic-Montag says a valid will allows a testator to provide for a common-law spouse, appoint an estate trustee, set out funeral wishes, make donations to charity, or distribute beloved items to family members.

“In the absence of a will, there’s ambiguity — which opens the door for disputes,” she says, adding that it’s not just wealthy estates that are subject to litigation.

“The emotional side of these fights can be quite terrible and very difficult to manage,” Popovic-Montag says. “We can always deal with the financial side. You roll up your sleeves and divide the lot.

"But when you have years of resentment and emotions, these disputes can erupt, and the cost and chaos of the ensuing litigation can drain the estate and short-change beneficiaries.”

To Read More Suzana Popovic-Montag Posts Click Here
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