Aretha Franklin left no estate plan or will

Queen of Soul, Aretha Franklin left no will or any estate plan which could open heirs to high estate taxes an create legal squabbles. Her four sons have filed a document listing themselves as interested parties for her estate.

Her niece has requested the court to appoint her as executor of the estate which has been estimated $80 million.

Franklin’s long-time attorney told the Detroit Free Press that he bugged her for years to set up a trust but she never did.

The lack of a trust or will could lead to hassles for her potential heirs. Jeffrey Eisen, a trusts and estates attorney with the law firm Mitchell Silberberg & Knupp in Los Angeles has represented potential heirs  in a number of contested or disputed estates. Many of those clients are prominent individuals and estates in the entertainment industry, including Muhammad Ali and Farrah Fawcett. He sees trouble ahead. He told Accounting Today:

 “It means that the State of Michigan is going to write her will for her because she didn’t have one, It means that she didn’t get to choose who would be in charge of her estate, including being in control of her music catalog. That’s going to be determined by the heirs, assuming they can agree. And it means that everything is going to be played out in public view, including the valuation of her assets, her music catalog — everything. It’s completely and totally public and all avoidable.”

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Jackie Gleason’s UFO houses for sale

A recent Realtor.com story talks about how the late comedian Jackie Gleason’s two “UFO houses” in Peekskill, NY are on the market for $12 million.

The current owner, a retired orthodontist, bought the 8.5-acre property in Peekskill, NY, in 1976 for $150,000—roughly equivalent to $660,000 today. The property was listed this month for $12 million.

The buildings were designed and built to reflect Gleason’s fascination with flying saucers. In the mid-’50s, he had the compound of spaceship-shaped houses built as party houses. The main house was called the Mother Ship and a guest house called the Scout Ship. Here is a slide show of the two structures from Parade Magazine. 

Everything inside Mother Ship is circular, with not one right angle. According to the NY Post, the home was “built by a shipbuilder in an airplane hangar, then disassembled and brought to the site.”

The property was used mostly as a work retreat from The Honeymooners, but he also used the place for parties.

The main house has with four bars, and visitors included Gleason’s drinking and golfing pal, President Richard Nixon.

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Toys R Us bankruptcy queers July Jobs report

Toys R US shuttered it last door in June an according to financial experts, that is to blame for the lousy July report.  The economy added 157k jobs but the expectation was 190k. Th miss correlated with the amount of jobs lost at “Toys.” Reports earlier in the year said the loss was estimated at around 31k jobs.

Toys R US shuttered more than 800 stores in June. Their trouble stemmed largely from a $7.5 billion leveraged buyout back in 2005. Private equity companies, Bain Capital and KKR & Co. saddled it with a heavy debt load reported to be more than $5 billion.

Federal lawmakers have sent letters to those companies seeking information on the debt they saddled the company with and what services they provided and at what cost. They also wanted to know if employees who lost their jobs would be provided with any form of severance.

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Retailer Brookstone files Chapter 11

Shopping mall retailer Brookstone has filed for Chapter 11 bankruptcy.  After 40 years in business, the company will be closing all 101 of its mall stores. It will however keep its e-commerce site and airport locations open.

This is the second time Brookstone has filed for bankruptcy. They first filed in 2014 and soon after were sold to a Chinese company, SanPower Group. at the time of the sale, the company had over 200 locations.

Brookstone’s claim to fame was that it allowed store visitors to try out their products. The fact that the stores were mall based meant thy were dependent on foot traffic and the decline in malls also saw a decline in foot traffic and the associated sales.

CFO Greg Tribou wrote in the company’s filing

“Mall stores have operated at a loss each year consecutively since 2014 as a result of shift of consumer preferences away from brick and mortar retailers (and shopping malls in particular) and the attendant loss of foot traffic that is so critical to the successful operation of retail stores.”

In the filing Tribou also addressed why they were seeking to keep the airport locations open

“Unlike the mall stores, consistent foot traffic, a captive consumer audience and limited seasonality has allowed these stores to thrive (on an aggregate level) in comparison to the Debtors’ mall stores.”

Brookstone is facing a debt of over $129 million.

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Why no will can be a bad thing

Your estate may not be worth a lot. But if you don’t leave a will, New York State decides where and to whom your stuff goes. Here’s how NY State puts it.

When a person dies without leaving a Last Will and Testament, it’s said that they died intestate. When a person dies intestate, that person’s property is distributed according to the law. In New York, that law is found in (EPTL 4-1.1).

Who gets what depends on who the living relatives are and their relationship to the Decedent, the person who died. The family members who are entitled to a share of the Decedent’s estate when there is no will are called “distributees”.

In simple terms from nycourts.com:

a spouse (husband or wife) and no children

 

the spouse inherits everything
children* but no spouse

 

children inherit everything
spouse and children*

 

the spouse inherits the first $50,000 plus half of the balance. The children* inherit everything else.
parents but no spouse and no children*

 

the parents inherit everything
siblings (brothers or sisters) but no spouse, children*, or parents

 

the siblings inherit everything
* If a child dies before the Decedent and had children of their own, then the Decedent would have grandchildren. Those grandchildren would step into the Decedent’s child’s place and inherit in place of the child.

About Decedent’s Children
For children to inherit from their parents, New York State requires that there is legal parent-child relationship. In most cases this is not an issue but it’s not always clear.

  • Adopted children will inherit just like a biological child.
  • Foster children and stepchildren will not inherit unless they were legally adopted.
  • Children born after the Decedent dies will inherit.
  • Children born outside of marriage, also called non-marital child, will inherit from a male Decedent if paternity is established
  • Grandchildren will inherit only if their parent (the Decedent’s child) dies before the Decedent died.

If the Decedent has no family at all, then the property will go to New York State.

 

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