Prince, a Legend
Prince, well known (I say, legendary) musician, passed away two years ago this April. What he left behind is reminiscent of the life he lived, at least his life through the publics’ eye. On one hand, Prince left his fans with smooth instrumentals, cherished memories, and a legacy accessible through many music platforms. On the other, Prince’s heirs are left in legal turmoil, significant financial loss, and likely emotional exhaustion. What can you learn about estate planning from Prince?
What can you learn about estate planning from Prince?
It became generally known that Prince passed without a will, let alone trust, shortly after his passing. To those of us in the estate planning world, this is incomprehensible, particularly given his wealth. Because Prince died without a will, his estate fell into intestate proceedings. Intestacy, is essentially a State prescribed will for people that do not create their own plan. There are some people that this State plan may work for, but those are typically the exception rather than the rule. How did dying without a plan impact Prince’s estate?
The Associated Press (“AP”) writes that Prince’s estate is worth an estimated $200 million and that there are six heirs that stand to inherit from the estate. (See the full article here) Unfortunately, the heirs, bankers, and lawyers have split into at least two factions over the valuation of the estate and other matters. For the last two years, these two factions, have spent MILLIONS of dollars on legal fees. (The bank alone has received $5.9 million in fees, with another $2.9 million requested)
Why Planning is Important and Not Only for Those with Multi-Million Dollar Estates
It is bewildering how a man of such fame and fortune could die without creating a plan. There exists business interests, intellectual property rights, partnerships, and complex valuations that could have been structured in a way to limit tax issues and fighting amongst his heirs. An estate this complex should have had a team of attorneys and financial advisors behind it. But, why should this matter to you?
Everyone has an estate, we have posted on this topic before. Perhaps your estate is minuscule in comparison to Prince, but it does not negate the need for planning. From properly structuring business interests, to guardianships for minors. From nominating an agent to make medical decisions, to where and how your body will be buried/cremated. From liability protection, to avoiding excessive legal fees and other probate costs. From hand-selecting beneficiaries, to leaving it up to the State. The vast majority of Americans stand to greatly benefit from making their own estate plan.
Missing the Point
The AP, and most news articles about Prince’s estate issues, focus on the amazing amount of wealth his estate will lose due to improper planning. The tragedy in Prince’s failure to plan, however, lies somewhere else. The emotional cost for his surviving family. The fighting and divisions because of the uncertainty. The sleepless nights and wasted resources. The reality that none of his heirs will be able to properly grieve until it is all over. While the heirs will likely wind up with a significant inheritance (even after expenses), this process and a divided family will always shadow their memories of their brother.