Celebrity deaths have a way of occupying the attention of the media. In addition, of course, to his immense talents, Prince’s recent death is noteworthy for his failure to do any estate planning. What lessons can us non-celebrities learn from his choice?
First, Prince’s estate will be worth hundreds of millions of dollars. Failure to do any estate tax planning means that both federal and state governments will take a substantial bite out of his estate, as much as half or more. Tax planning could have helped the estate avoid taxes altogether, or at least substantially lessened that blow.
Second, although a reportedly private person, Prince now has lost all privacy. All of the decisions regarding his estate, all of the details of his net worth, and all family tribulations will play out in a very public probate proceeding.
Third, failure to plan means that Prince’s music may not be controlled in the way he would have liked. Whoever the court appoints to administer the estate will decide whether to release unpublished songs and how the estate might otherwise profit from Prince’s image. Without planning, no charities can benefit from the estate.
More importantly, Prince leaves behind a confusing family situation. At least one paternity suit has been filed. The people who will inherit from Prince’s estate will be decided based upon Minnesota’s intestacy laws. There is sure to be a lengthy and expensive court battle ahead.
Like many of you, I am puzzled as to how Prince could have let this happen. Someone with that amount of fame and fortune should have had advisors pushing him to do appropriate planning. In fact, reports are coming out that Prince’s advisors did suggest estate planning to him, but he was distrustful of them. Accordingly, he would not follow the advice of anyone on his professional team, nor make any commitment to estate or tax planning. Whether this distrust was caused by a feeling that he had been taken advantage of by advisors earlier in his career or whether he simply was afraid to discuss estate planning, the result is chaos, fodder for the media, and a likely financial boon for a handful of Minnesota lawyers.
A lesson is clear: Find good professional advisors and listen to them. You don’t have to be a celebrity to desire privacy, the ability to control the distribution of your assets, and saving your heirs taxes. Everyone should have a core team, including a financial advisor, CPA, and estate planning attorney. If you have only one advisor you can trust, ask for recommendations about others. If you don’t know anyone in these professions, ask friends and colleagues, conduct a search on the internet, and meet and interview several before deciding on who to hire. You can find someone to trust and to guide you through the estate planning process.