Skip to main content
A Better Partnership

Publications

Jul 2016
21
July 21, 2016

Prince's Death: A Lesson on the Importance of Estate Planning


In the months since Prince’s death on April 21, the court handling his estate administration has received numerous claims from individuals alleging to be his heirs, all hoping to share in his estimated $300 million estate. Prince’s failure to create an estate plan has been well-publicized, and because the disposition of his estate will be based on Minnesota inheritance laws, an individual’s ability to establish a blood relationship with Prince could result in that person’s receipt of tens of millions of dollars.  

In initial court filings, Prince’s sister identified herself and five half-siblings as Prince’s heirs. Since that time, four more people have contacted the court claiming to have blood relationships with Prince.

These individuals include a woman claiming to be the daughter of Prince’s half-sister, the daughter and granddaughter of a man who claimed during his lifetime to have been Prince’s half-brother and Carlin Q. Williams, an inmate in federal prison claiming to be Prince’s son. The court has established a protocol requiring anyone claiming to be a blood relative to complete a rigorous questionnaire under oath, potentially followed by DNA testing. This procedure will establish Prince’s heirs at law and, ultimately, the beneficiaries of his estate.

What Happens When a Person Dies Without a Will?

If a person dies without a will, state law governs who will inherit that person’s estate. Under Minnesota law, because Prince’s parents are deceased and he has no spouse, his estate would first pass to any surviving child. If Williams can prove that he is Prince’s son, he will inherit the full estate. If Williams’ claim fails, the estate will be divided among Prince’s full and half-siblings and the daughter and granddaughter of Prince’s deceased half-brother. Depending on the results of the heir determination process, significant portions of Prince’s estate could pass to individuals with whom he had no personal relationship or, in the case of Williams, potentially never even knew existed.

What’s more is that Prince’s estate will have to pay a hefty tax. The current federal estate tax is calculated at a rate of 40 percent and Minnesota imposes a top death tax rate of 16 percent. That has the potential to reduce Prince’s $300 million estate to $162 million.

With some planning, Prince could have taken steps to reduce this enormous tax bill. Before his death, Prince donated generously to various charities. By failing to have an estate plan in place that continues these charitable gifts, not only will Prince’s estate lose out on tremendous tax savings (since charitable gifts are a deduction for estate tax purposes), but the government, rather than charities, will benefit financially.

Finally, the lack of a proper estate plan means that Prince’s estate will be complicated by costly legal fees and uncertainty, and the estate proceedings will be open to the public.

So What Can We Learn?

While the lack of a proper estate plan may seem more problematic for a mega-million-dollar celebrity, the truth is that these same issues affect everyone.  
  • If you have specific loved ones you want to inherit your estate or you have minor children, you will want to specify who will be in charge of and administer your estate  and you need a will.
  • If you prefer privacy, a trust allows you to specify who will receive and administer your estate without the publicity or cost of probate proceedings. 
  • If you are over 18, you should have a patient advocate designation allowing another to make your medical care decisions if you become disabled.
  • If you own property of any type, you should have a durable power of attorney allowing another to manage that property on your incapacity.
Is now the time to create an estate plan? The answer is yes. Death can often come unexpectedly and you don’t need to be wealthy to benefit from estate planning. By planning now you can make things easier for, and better protect, the people you care most about. 

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

By clicking the ‘ACCEPT’ button, you agree that we may review any information you transmit to us. You recognize that our review of your information, even if you submitted it in a good faith effort to retain us, and even if you consider it confidential, does not preclude us from representing another client directly adverse to you, even in a matter where that information could and will be used against you.

Please click the ‘ACCEPT’ button if you understand and accept the foregoing statement and wish to proceed.

ACCEPTCANCEL

Text

+ -

Reset