The sudden death of music icon Prince saddened fans around the world. However the turmoil surrounding the entitlement to, and distribution of his assets can teach us all some valuable lessons about how intestacy can cause nightmarish issues in estate planning.
Prince was an extremely private artist who was insistent upon having a great deal of control when it came to creative licensing rights and his music. His legal skirmishes were almost as legendary as his music; so it came as a huge shock when his family discovered that he had no will in place in the event of his death.
Due to Prince’s lack of planning, there are several issues that may end up leading to extensive estate litigation:
With no will naming beneficiaries of his estate, Prince’s family will likely argue for years to come over his assets, who has the right to control the management of his assets while they are being probated and who will ultimately own those assets.
Minnesota state law requires that if an individual dies without a will and does not have a wife or known children, the estate will be passed to their brothers and sisters. In Prince’s case, his sister as well as his half-siblings will be eligible to inherit his estate. However, squabbling among his siblings has already begun; Prince’s full sister believes she has a greater claim on the estate, even though Minnesota intestacy laws state otherwise. If a will or trust does surface, the battle over his estate may become even messier.
In the middle of the squabbling among his siblings, some have already begun to step forward claiming to be Prince’s offspring. If any of these claims prove to be viable, then the claims of his siblings will become moot as the estate could be inherited in its entirety by one child instead of divided among all of his many siblings.
There is still a chance that a will or trust may surface.
Prince’s sister, Tyka, claimed him as intestate only 5 days after his death; not nearly enough time to conduct a thorough search of his residences and personal property to look for a pre existing will or trust. For this very reason, many states provide for a waiting period for the qualification of an estate administrator, in order to avoid prospective administrators racing to the courthouse after a death seeking to gain what could be an enormous administrator’s fee.
Tax penalties will be severe, and probate will be a lengthy process.
Since Prince did not have a proper estate plan and wasn’t married, this means that his estate will pass through the process of intestacy and will be subject taxes of up to 40%. The IRS currently allows for up to $5.45 million dollars to be passed to heirs tax-free, but this is a pittance compared to the value of his entire estate. In addition, since Prince’s estate was large and there are multiple claims on the estate, the process of probate will certainly take many years to complete and become extremely costly due to legal fees.
Intellectual property issues will further complicate matters.
The value of Prince’s estate will be subject to a great deal of scrutiny, as much of the value is determined by the worth of the rights to his music, as well as the right to profit from his name and likeness, all of which is considered intellectual property and difficult to value. In addition to the music Prince has released over the last three decades, he wrote thousands of unrecorded songs that he vigilantly protected from public release. His album sales have also surged since his passing, further increasing the value of his taxable estate. If whoever inherits the rights to Prince’s intellectual property astutely manages those rights, the name “Prince” could potentially have greater worth than it did when he was alive.
Unfortunately, failing to prepare a will or trust is a common mistake that many people make. Hiring competent attorneys to help mitigate conflict and guide you through the process of fair distribution of assets will have a significant impact on the ultimate value of one’s estate and its eventual distribution among your chosen beneficiaries instead of the heirs chosen by default under the terms of each state’s intestacy statutes.
Prince’s estate dilemma is an example of why it is critical to have a will or trust set up to protect your assets and avoid disputes among heirs. Should a relative pass away with no apparent will, it is critical to secure legal representation if you believe you are entitled to a portion of their estate. The process of probate can be lengthy and confusing, and distributing the assets of a loved one can create an extremely stressful situation for all concerned.
If you are in need of legal guidance regarding an estate dispute, our attorneys are among the most experienced and well-respected Estate and Trust litigators in Georgia. Contact us today at 404.892.9797 to speak to one of our knowledgeable attorneys.
