Justin Jeppesen: Prince's Apparent Estate Planning Mistake is Your Learning Opportunity
/On April 21, 2016, Prince died unexpectedly and unceremoniously in an elevator. And shortly thereafter, the money grab started. You see, Prince’s estate is currently valued at approximately $300M. That number has the potential to grow to $500M, due to posthumous record sales caused by an increase in interest and an alleged stockpile of unreleased music in a vault.
The shocking side of this story, aside from the death itself, is that Prince did not have a Will or a Trust. At least, currently there hasn’t been one found and no one is claiming they knew of one. Even his former manager, Owen Husney, finds it hard to believe he did not have an estate plan, saying, “It is hard to imagine that Prince would have failed to draw up a will and an estate plan prior to his death … because he was too smart to have overlooked something that crucial…”
Without a Will or Trust, the entire estate, including royalties, will be passed through Minnesota’s Intestate Succession. Prince was not married, had no known children, one known full sibling, and a few known and unknown half-siblings.
Also, since Prince did not have a Will or Trust, he did not have the option to select who should oversee his massive estate. The Court is appointing a special administrator.
My guess is that the Special Administrator, who will receive payment for services rendered from the estate, is going to earn a hefty fee. Why?
Because of the number of people who have reasonable expectations to receive a part of his substantial estate. His estate can potentially be divided between his full sister and his half-siblings. Also, there are some unknown half-siblings coming forward to collect. If you were the only full sibling, would you easily share what you believe is your rightful inheritance with a “half-sibling” you have never met? Not likely.
Is that what Prince would have wanted? As of now, we don’t know since there is not a Will or Trust that has been found.
Lessons to learn from Prince’s situation: 1) create a will or trust so you can decide who will have control over your estate when you pass away, 2) name exactly who you would want to receive your assets when you pass away and take the guess work out, 3) if you don’t want the public to know what your beneficiaries will receive and who they are, create a trust.
So, what does this mean to you? Just like Prince, if you do not plan for your death, your family will get stuck in Court and could end up in conflict as well. It’s an unnecessary expense to your family, it's public, it causes additional heartache and grief, and is totally avoidable.