Prince’s estate finally settled after 6 years

Three of his heirs sold their inheritance to Prince Oat Holdings LLC (Primary Wave), who bought out the rights to Prince’s substantial song catalogue last year. The other three kept their stakes, managed by Prince’s long-time advisers, L. Londell McMillan and Charles Spicer.

Getting to this point has cost the estate six years of legal bills (rumoured to be in the region of $10 million) and so we must ask why the estate took so long to administer?

In short, the majority of factors that prolonged the estate administration, could have been avoided if Prince had made a Will.

Whilst it didn’t take long to establish that it was Prince’s siblings that would inherit his estate, this led to numerous individuals coming out of the woodwork and purporting to be related to him.  This caused delays as these claims were investigated and DNA tests were undertaken.  Had Prince have made a Will naming his intended beneficiaries, then this could have been avoided.

It is also purported that a Will may have been helpful in reducing the 40% tax bill to the federal government and the 16% bill for Minnesota.  Whilst we do not specialise in the tax rules of Minnesota, presumably if Prince had been prepared and undertaken appropriate tax planning, this sum could have been mitigated.

However, the length of time taken to administer the estate cannot be blamed solely on the intestacy.  Prince owned a lot of assets, some of which were difficult to agree the value of.  There was reportedly a long running dispute between the IRS and the estate regarding valuations for properties and song rights, with the value of the song rights only being agreed in October last year.  Intangible assets with no physical form are notoriously difficult to value, as they cannot be readily converted to cash.  However, if Prince had arranged for his estate to be valued intermittently throughout his lifetime, then the negotiations with the IRS may not have been so protracted.

The take aways from this are:

• You are never too young to make a Will – Prince was only 57 when he died and the administration of his estate would have been much simpler had he had one;
• A Will would also have ensured that the people he wanted to benefit from his estate did; some people favour friends or charities as beneficiaries rather than remote family members;
• A Will is all the more important if your estate is likely to be subject to tax on your death; and
• Know the value of your estate during lifetime: not only does this provide your executors with a starting point for negotiating the value of your estate on your death but also allows you to undertake accurate tax planning.

If you require any legal advice in relation to your Will or estate and inheritance tax planning, please get in touch with your usual Wealth Preservation team member for assistance.