The unexpected and shocking death of Prince last week has sent the media abuzz as they speculate about the potential cause of death. However, as the dust begins to settle, speculation has turned to the other big question: Who will inherit his vast estate valued anywhere from an estimated $150-300 million?
On Tuesday, Prince’s sister filed paperwork in Minnesota (where Prince resided and died) asking the court to appoint a special administrator to oversee his estate. This step was necessary because it appears that despite his fortune, Prince did not have a known will and therefore, may have died intestate.
Of course, it is still possible for a will to emerge after further investigations are undertaken. Some are speculating that a trust or series of trusts may have been established to avoid the public scrutiny that would have been involved in probating a will. Trusts are commonly used vehicles for celebrities who wish to maintain some semblance of privacy after death.
However, if there was no estate plan in place, Prince’s estate will be devolved in accordance with the Minnesota laws of intestacy. Prince was not married, had no children, and was predeceased by his parents. He was survived by two ex-wives, his full biological sister and five half-siblings. Under Minnesota law, ex-wives do not qualify under intestacy rules and half siblings are treated the same as full siblings. Accordingly, Prince’s six surviving siblings stand to potentially inherit a significant fortune.
As an additional concern, there are often claims made against an estate of this magnitude, some valid and some not. Unfortunately, the absence of any testamentary document to support Prince’s actual intentions may only exacerbate and encourage this effect. These types of claims can vary significantly from dependant’s support to creditors’ claims.
The laws of intestacy seldom reflect the true intentions of a testator and can lead to many potentially avoidable complications. For instance, family dynamics are becoming increasingly complex with the prevalence of common-law spouses and blended families, just to name a few examples. As a result, while intestacy rules aim to distribute an estate among those the law presumes to be closest to you and to whom you may owe support, the practical effect is that this desired result is rarely achieved.
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I recently read an article named “The Lessons of Famously Bad Estate Planning”, authored by Steven Morelli. This article looks at disasters that have followed celebrities because of the absence of a properly planned Will.
Jimi Hendrix died without a Will which started a family war that would end up in court for more than 30 years.
Sonny Bono, an American record producer, singer, actor, and politician, died without a Will. It is mind blowing that someone so successful would not have a carefully planned Will. Of course, numerous people lined up to advance claims against his estate, which included Cher, and the inevitable love child. Sonny could have saved his widow and everyone else involved a lot of grief and aggravation if he had taken the time to do some simple estate planning.
For those of us who have taken the time to prepare our Wills, Mr. Morelli reminds us of the importance of updating our Will. For instance, Anna Nicole Smith died with a Will; however, her Will contained a provision which specifically excluded “future children” from benefiting from her estate. This clause had the effect of leaving her entire estate to her now deceased son, and disinheriting her five month old daughter. A judge eventually fixed this estate mess, but it came at an unnecessary expense.
Mr. Morelli puts it perfectly: “The essence of estate planning: control. Whether it involves celebrities maintaining their image for all posterity, or wealthy land-owners keeping their families’ holdings intact, estate planning protects clients’ control. Quite often people don’t want to discuss estate planning because it involves their death. But clients should understand that it is essential to maintaining their family’s stability and dignity.”
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Rick Bickhram – Click here for more information on Rick Bickhram.