Prince’s recent death highlights the value and purpose of a Will. A Will is something many people don’t think about until they get older, but at any age it is important to make sure your family is secure should the unexpected happen. When a celebrity, or anyone with a sizable estate, passes away without a Will, dividing assets can become a difficult and messy task. Price’s death was a shock because he was relatively young, and now his lack of a Will has created a special set of obstacles for his family to work through. Let’s take a look at some specific issues that can result from not having a Will.
Division of Assets
First and foremost, a Will is designed to determine how a person’s assets should be distributed after their death. Since Prince had no Will, his assets will be divided by the court, based on the laws of his state of residence. In Prince’s case, things are made even more complicated: because he was unmarried with no children, his assets will be divided among his sister and his half brothers and sisters. In the state of Minnesota, where Prince resided, the law dictates that siblings and half siblings receive equal shares of an estate. Not only will those assets be subject to estate taxes, but the lack of a properly written Will may lead to years in court as the family battles over the division of his estate.
Because Prince’s estate will be taxed, the IRS will receive a hefty sum—40% of the estimated $300 million estate. The State of Minnesota will receive another 16%. While Prince had no spouse to whom he could have left his estate entirely tax free, with some proper estate tax planning he may have been able to lower, or even eliminate this tax burden. If you are unmarried and currently trying to determine who will inherit your estate, tax planning is definitely something to consider.
A significant part of Prince’s estate is his creative assets. As a musician, Prince held the rights to his music and continued to make royalties off of the use of his songs. These assets will also have to be divided among his family members, which could take years in court. While this isn’t an issue for the average person planning an estate, it will make a huge difference for Prince’s family.
Having a properly planned estate will not only ensure that your assets are divided how you wish, it can also prevent long legal proceedings that may have your loved ones in court for years. In Prince’s case, it is doubtful that these proceedings will go smoothly, considering the size and nature of his estate, and the value of the legal rights to his recordings. Highly publicized deaths of celebrities or public figures should serve as a reminder to us to get our affairs in order, should the unexpected happen.