What Prince’s Estate Can Teach Us About Estate Planning

Whether your estate is worth $100, or $100 million, you need to plan ahead to make sure it goes to the right people.  (Photo: Doyoun Seo/Unsplash)

Music genius Prince, aka The Great Purple One, aka Prince Rogers Nelson, seemed to have everything, even his own custom shade of purple created just for him.

But what the musician left behind after his untimely death in 2016 was a big legal mess, since Prince apparently never drafted a Trust or Will indicating who should inherit his considerable and unique collection of assets.

You might not have an estate valued at between $100 to $300 million dollars like Prince, but the same situation could confront your family if you die without proper estate planning documents in place.

In the five years since Prince’s death, the courts stepped in to identify his sister and five half-siblings as heirs. They named a financial firm to administer the estate. But the estate remains tied up in court with the heirs, banks, attorneys and other advisors fighting over who gets what and how the assets should be managed. Not to mention the fight with the IRS over the ultimate value of the estate and how much in taxes is due the government.

Over those five years, “the heirs haven’t seen a penny of inheritance or had any control over commercialization of the estate while it remains in probate,” reports the Wall Street Journal. They have also reportedly confronted tens of millions of dollars of legal and other fees and a potential 40% tax bill to the U.S. Government and 16% to the state of Minnesota.

Seeing what happens to celebrities like Prince coupled with the COVID pandemic have made many Americans keenly aware that, without the right legal documents, their families may not receive the assets they deserve in a timely fashion.

Simply put, if you don’t make your own plans to distribute your assets, the courts might do it for you, and there’s no guarantee that they will pick the same heirs that you would.

The Takeaway:  Make it a point to draft your estate planning documents before the year is over. It need not be complicated nor expensive, and it could save your loved ones months of delays and thousands in unnecessary court costs. Need an attorney referral? Just give us a call, and we’re happy to point you in the right direction.

 

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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