Seven of the soul legend's 11 children had reportedly applied to improperly obtain copyright on a dozen of his songs, according to The Wrap.
The lawsuit states that Charles left his children $500,000 each as long as they did not attempt to apply for further inheritance money.
The Ray Charles Foundation - which gives funding towards youth programmes and research into hearing issues - is the sole bearer of Charles's estate.
His children are said to have sought copyright for the songs in March 2010 under the 1976 Copyright Act, which allows artists to reclaim royalties years later if its value has increased.
The foundation is demanding that they be banned from having any dealings over Charles's songs, and to pay back each of their $500,000.
Ray Charles died in June 2004 at the age of 73.
Watch Ray Charles perform 'Georgia on My Mind' below: