Prince’s Estate Serves as Prime Example of Why You Need an Estate Plan
If you are looking for a cautionary tale highlighting the pain and expense of dying without an estate plan, Exhibit A is the rock music icon Prince’s estate.
It has been two years since news broke that Prince passed away due to an accident overdose of Fentanyl, a prescription pain medication. In those two years, no money from the estate has been paid to the beneficiaries. Why? Because the executor of Prince’s estate, Comerica Bank and Trust, cannot legally divide the singer’s fortune among his six surviving siblings until the IRS and executor reach an agreement on the overall value of the estate when Prince passed away.
The Expense of Litigation of Prince’s Estate
One of the key benefits of putting together a detailed estate plan is the ability to clearly establish who gets what from your estate thereby reducing the risk of expensive, protracted litigation and mitigating the costs of managing your estate.
Unfortunately, since Prince died without a will (i.e. meaning he died intestate), there was no clear directive on which family member(s) were to receive what from his estate. This meant family members immediately turned to the courts and initiated litigation that remains active to this day. In addition to litigation costs, there is the simple fact that managing a large estate can be expensive, and Prince’s estate was substantial. Many analysts estimate the estate’s value to be between $100 million and $300 million and much of that value is in music rights, brand value, property, and so forth. This is why the fees associated with managing such an estate can be quite high. For example, Comerica Bank and Trust has had to retain attorneys to address issues with trademarks, oversea litigation and deal proposals concerning Prince’s music.
Many of Prince’s siblings have been shocked at the fees charged by Comerica for managing the estate, but it is important to note that Comerica has provided more than 600 pages of invoices showing exactly where the funds are being utilized and why it costs so much to manage Prince’s estate, according to Page Six.
Steps You Can Take to Reduce Estate Expenses
When you pass on, you want to make sure the funds in your estate go to your loved ones rather than being spent on litigation and court costs. You also want to try and avoid the expense associated with probate, which the legal process that is needed if you pass on and leave only a Last Will and Testament. Here are some ways you can eliminate probate and other expenses:
- Create a trust – assets you put in a trust are passed through trust administration rather than probate. The terms of trust administration can be refined and spelled out when creating your trust.
- Set up pay-on-death (POD) accounts– These accounts can be set up to automatically transfer certain assets to a designated beneficiary upon your passing.
- Joint ownership of property– If you purchase a piece of property and the purchase includes a joint tenancy with rights of survivorship provision, that means the property can pass automatically on to co-owners of the property and will not pass through the probate process.
- Including a no contest clause in your estate plan– This clause means that if a beneficiary attempts to contest your will or trust and they are unsuccessful, the beneficiary will effectively be removed from your estate and receive nothing. These clauses are not ironclad and you should definitely have a skilled attorney review the language to ensure it will be enforceable in court.
Take Action – Contact Polaris Law Group Today
Creating a detailed and effective estate plan can be quite complicated, especially if you have a large estate. The Polaris Law Group is here to help. Our firm is comprised of experienced and skilled St. Charles trust and estate attorneys Scott Stork and Raymond Chandler. Schedule a meeting with Scott or Raymond today by phone or by filling out a quick contact form today.