Thursday, March 11, 2021
Since Aretha Franklin's death in 2018, there has been a looming debt ganging over her estate. After three years, Franklin's estate is moving toward an agreement with the Internal Revenue Service (IRS) to repay this debt which is comprised of "thousands and thousands of [dollars] in federal revenue taxes that the singer owed throughout her life. . ."
The settlement requires the estate to put aside 45% of all income it receives to repay the tax responsibility that Franklin accrued from 2010 to 2017. Also, $800,000 is to be paid to the IRS within 5 days of the deal's approval.
A document submitted in court on February 19, states that the IRS has declared that the state owes $7.8 million, but apparently, this determination did not include about $3 million that the estate alleged it paid at the end of 2018.
Under the deal, 40% of the estate's revenues will be put toward ongoing taxes and funds to Franklin's heirs. This 40% will be generated by music royalties and licensing and is allowed to be held in escrow.
If a deal is reached, the estate will have room to breathe and bring in revenue.
The worth of Franklin's estate has not been fully determined but it has been estimated to be around $80 million.
There were also multiple wills found, which has lead to a stark divide between Franklin's alleged heirs as members of Franklin's family have been battling to prove which documents should be probated.
See Ben Sisario, Aretha Franklin’s Estate Signs Tentative Deal Over Back Taxes Owed, N.Y. Times, March 2, 2021.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.