Nationwide (BlackNews.com) — Aretha Franklin, the Queen of Soul, is a legend that will never be forgotten. But with all due R-E-S-P-E-C-T, the IRS is probably singing with joy because she reportedly left no will when she died. Apparently, she did nothing to shelter her assets from the Taxman. “The IRS will eat 40 percent of Aretha’s estate with the death tax,” says celebrity tax advisor Jayson Thornton of Thornton Tax Firm.
But the Estate taxes could have been limited. Thornton says Franklin could have set up an estate plan with trusts to benefit any relatives and charities she chose, while leaving very little if anything to be taxed. “When Black celebrities die, their money normally goes to 4 places; family, friends, charity, and the Taxman,” said Thornton.
Not settling up a trust that would have given Franklin’s beneficiaries set amounts; they now have to fight over the Taxman’s leftovers.
For 2018, the estate tax exemption is $5.6 million per individual. That means an individual can leave $5.6 million to heirs and pay no federal estate taxes. A married couple will be able to shield $11.2 million from federal estate taxes. Aretha Franklin died with a reported estate net worth of $80 million, which could end up paying almost $27 million in Federal Estate Taxes.