Music lovers around the world mourned the recent death of Prince. Regardless of whether you grew up listening to Prince’s unique style of music or not, you know he had a profound impact on the development of pop music.
But what about his legacy? What will happen to his estate? Like so many Americans, it appears Prince died without a will—or in legal terms, he died intestate. There is much we don’t know, such as how much his estate is worth, who will be in charge of handling his affairs, and will his unreleased recordings ever be published.
But because Prince apparently didn’t do any estate planning, even at this early stage there is much we do know, such as:
1. Prince’s estate will be subject to a probate proceeding in Minnesota, and possibly in any other state where he owned real estate. This likely will take many months, if not years, to complete, and will be very costly.
2. Because of probate, details of Prince’s estate will become public. For example, Prince’s sister, Tyka Nelson, recently filed a court petition in a Minnesota probate court, which is already online and available to the public. More filings, and details, will be available as the process progresses.
3. Minnesota laws will determine how Prince’s estate is distributed. Prince’s heirs include one full sister and five half-siblings. According to Minnesota law, without a will, his estate will be divided equally among all of his siblings and half-siblings. Without an estate plan, Prince’s desires are not considered.
4. Prince’s estate will have to pay estate taxes. While the current estate tax limit is at its highest level ever—$5.45 million—Prince’s estate will certainly exceed that amount. Taxes of 40% of the amount over the limit must be paid to the IRS within 9 months of Prince’s death. In addition, Prince’s estate will have to pay Minnesota estate tax of 10-16% of everything in excess of $1.6 million.
Perhaps the most important thing we know is that Prince missed an important opportunity.
Prince could have taken advantage of a living trust which is a very effective means of protecting his assets and keeping his affairs private. Even if you don’t have the millions of dollars Prince had, keeping your affairs private, protecting your beneficiaries from creditors and divorce, minimizing taxes, and simplifying the administration of your affairs when you pass away or become incapacitated are all important reasons to create a trust now, before it is too late.
Kevin Kinghorn’s practicality, expertise and experience allow him to help his clients wade through complicated issues to find custom solutions to his clients’ individual circumstances and needs. Even more, Kevin enjoys the friendships and lasting relationships that are created with his clients. If you would like to make an appointment to find out how we can help protect your legacy, call (520) 529-4000, or visit us online at www.KHarizona.com.