Don’t be like Prince

Prince, who had a storied music career, passed away on April 21 at the age of 57. A musical prodigy, he was a seven-time Grammy winner and was inducted into the Rock and Roll Hall of Fame in 2004.

Yet for all his genius, Prince left behind no known will or trust to determine how his estimated $300 million estate would be divided. As a result, much of it will be squandered.

The Government Takes the First Cut

The federal and state governments will take the first cut. His assets will be subject to a maximum 40% federal estate tax and a minimum 16% tax from the State of Minnesota. Together, those could ultimately drain away $150 million—half his estate.

Next, his sister Tyka Nelson and his five half-siblings will battle it out in court for what’s left. According to CNN, the situation has already turned contentious. The first meeting between the siblings reportedly ended in a shouting match, and the subsequent legal fees will likely be through the roof.

Worse, more people keep coming out of the woodwork claiming to be a half-sibling. One man has even claimed to be Prince’s son—a long-forgotten love child. If he can prove it, he could stand to inherit everything.

What will likely happen? After the government takes its cut, Prince’s relatives will spend what’s left on themselves.

A Wasted Legacy

This is such a shame, because Prince wouldn’t have wanted his legacy wasted. During his lifetime, he was a prolific philanthropist with several causes near and dear to him. Now those causes will likely never see another dime of his money.

Celebrity deaths often highlight the importance of getting an estate plan. The public quickly learns there was no will or trust, and then we watch as the family tears itself apart.

It Can Happen to Anyone

Still, it’s critical to understand that these estate issues can plague middle-class families, too. These families may not have a yacht to fight over, but they can certainly fight over grandma’s wedding ring, dad’s muscle car, or mom’s photo album. Those fights can be just as nasty, and they can tear a family apart just as easily.

If you already have an estate plan with us, great—you’ve taken the necessary steps to avoid all this. If you haven’t done your estate plan yet, use this as an opportunity to schedule a free consultation and explore your options.

Don’t be like Prince. Make sure your estate plan is done. Call us to set up a free consultation.

UPDATE 9-27-2016: Vulture.com just put out an update on Prince’s estate as of September 27, 2016. As you’d expect, the situation is still a mess. Here’s a direct quote from the article:

“Judge Eide also had his hands full with dozens of people who claimed to be Prince’s blood relatives, including a Colorado inmate alleging to be his love child; a woman seeking $750 billion as compensation for her “now 40 years long post-Civil Rights Movement Sociopolitical Hostage Crisis” that somehow had something to do with the Purple One; someone who filed a billion-dollar claim thanks to an “implied agreement”; and a secret wife who claimed to be involved in a C.I.A. cover-up. On July 29, Judge Eide dismissed 29 of these cases and ordered DNA testing for Tyka, John, Norrine, Sharon, Brianna, and Victoria to determine who really is biologically related to Prince on his father’s side. The results of those DNA tests have not yet been revealed.”