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Learn from Prince: Be Prepared!

Sep 28, 2016 - Estate Planning by

After the shock of Prince’s unexpected death, it was discovered that he did not have a Last Will and Testament.  This raises a host of issues for his estate, from valuing assets to determining the ultimate beneficiaries.  The most important issue (at least in his case) may be control:  Who will control the legendary “vault” that stores hundreds of unreleased songs?

Because Prince closely maintained control and ownership over the rights to his music during his lifetime, it is astounding that he did not properly plan for protecting his most prized asset.  When a person dies without a Last Will he or she is considered “intestate.”  Each state has laws that specifically dictate how a person’s “intestate” estate will be distributed. Typically, a spouse is entitled to all or a portion of the intestate estate and may share the estate with the decedent’s children.  Prince had no spouse, no known children, and his parents predeceased him; therefore, the intestate law in Minnesota directs that his siblings, including half-siblings, share equally in his estate.

In Florida, if a person dies intestate, the law first looks to see if there was a surviving spouse.  If so, the next question is: Did the decedent have any children?  If not, the surviving spouse takes the entire estate.  If the decedent had children and the children are all descendants of the surviving spouse, then the spouse takes the entire estate.  If the decedent had children any of which were not also descendants of the surviving spouse, then the spouse takes one-half of the estate and the children take one-half of the estate.  If there is no surviving spouse and no children, then the intestate estate would pass equally to the mother and father of the decedent, or all to the survivor.  If there is no living spouse, children or parent, as in Prince’s situation, the estate will then pass to the siblings.

Florida law, however, differs from Minnesota law.  While Prince’s five half-siblings and one full sister will receive the same equal share under Minnesota law, according to Florida Statutes Section 732.105, the “half-blood shall inherit only half as much as those of the whole blood.”  Therefore, rather than dividing the estate into six equal shares, if Prince had been a Florida resident, his estate would have been divided into seven equal shares, his full sister would receive two shares and each of his five half-siblings would receive one share.  In an estate with an approximate value of $300 Million (and growing), this difference in state law could be worth millions.

What else does intestacy mean?  It means no control of what happens after your death.  Intestacy means that although Prince took painstakingly severe measures to protect his music during life, he didn’t think about preserving his legacy when he had the opportunity.

Dearly beloved, we are gathered here today to get through this thing called life.
Electric word life, it means forever and that’s a mighty long time, But I’m here to tell you…
There is something else, the after world.

–   Lyrics from Prince, the Revolution  song “Let’s Go Crazy”

Prince had the ability to plan for how his beloved ballads would be handled and released to the public, but did not take the time to do so before entering the “after world.”  A special administrator has been appointed by the probate court, but whether the administrator puts the right person in place to manage the music remains to be seen.

This also means that attorneys, appraisers, accountants and other professionals will likely make millions of dollars during the administration of Prince’s estate. At one of the first probate hearings which lasted less than 10 minutes, Prince’s six siblings attended, with 12 attorneys representing them.  Even worse, for someone who was very private, the majority of Prince’s estate administration will be public record.  Had Prince used a revocable living trust, most of the assets would pass outside of the probate court and away from the public eye.

Prince is not alone.  According to the American Bar Association, 55% of Americans, regardless of wealth and social status, die without an estate plan in place.  Many say, “I don’t have an estate, so I don’t need an estate plan.”  However, most people have something they want to protect: music, children, a business, a spouse, aging parents, beloved pets, or a family home.  By taking the time to put your wishes in writing now, you will save much time, frustration, and future expense.