Several of the events surrounding the initial administration of Prince’s estate provide lessons applicable to all estate plans, not just celebrity estate plans.
- If You Don’t Have an Estate Plan, the State Will Write One For You. Prince died without a Will. Because he was not married at the time of his death and he had no surviving parents, children or grandchildren, his sister, and his five half-brothers and half-sisters each will inherit one-sixth of his estate. Two other half-siblings died before Prince, apparently leaving no children of their own; otherwise, they would be entitled to part of the estate as well.
That’s because Minnesota law, like California, puts siblings fourth in line (after a spouse, parents, and descendants). And, like Minnesota, California treats half-siblings the same as full siblings. It is far from clear that Prince would have wanted this; for example, it is not evident from press reports how close he was with his sister, much less any or all of his half-siblings.
If Prince had a Will, or better yet a living trust, he could have left his estate to whomever he pleased.
- If You Don’t Have an Estate Plan, Your Relatives and a Court Will Decide Who is In Charge of Your Estate. Generally speaking, the people who inherit your estate if you don’t have a Will also have priority to decide who will be your Executor and manage your estate. Prince’s full sister went into court, miraculously without objection, and nominated a Bank to serve as temporary Executor. That was probably a wise move, as an estate as complex as Prince’s would benefit from professional management. But if one of the half-siblings objects before a permanent Executor is appointed, a legal free-for-all could erupt.
- If You’re Famous (or Just Like Privacy), if You Don’t Have a Living Trust, Your Entire Net Worth Will Be Revealed to the Public, as Will Every Aspect of Your Estate. If Prince had at least a Will, he could have decided who would inherit from him, and who would be in charge of his estate. But even then, the affairs of the famously private Prince still would have been carried out in public, via the Probate Court proceeding. If he had gone a step further and created a revocable living trust, and transferred his assets to it, he could have kept all his post-mortem affairs out of the public eye, unless and until someone tried to contest the trust or a beneficiary filed a legal action about how the trust was being run.
- Prince Could Have Controlled the Use of His Name, Likeness and Intellectual Property. Often, there are special assets of an estate which require special handling. Sometimes it is the family business, or a special piece of real property. In Prince’s case, he had at least three very special items—the copyrights in his music, his “name and likeness,” and his “Paisley Park” compound.
Prince fought for over a decade to gain control of the copyrights in his musical compositions; by not having an estate plan, he has absolutely no control with how his “catalog” of released music will be handled, and whether/how the reported “vaults” of unreleased recordings will be exploited.
The same goes for the use of Prince’s name and likeness. How will his image be marketed? Could there be Prince coffee mugs to which he would have vehemently objected if he were alive? How will all of this be valued for purposes of paying the 40% federal estate tax? Robin Williams not only left his name and likeness to charity to avoid estate tax on his tricky/impossible to value name and likeness, he also prohibited its exploitation at all for 25 years after his death.
Finally, there is Prince’s Paisley Park home and studio. Early reports are that it might be turned into a museum. Did Prince want the public walking through his home? Would he have allowed it if the museum were a charity, with net proceeds of admissions and merchandise sales going for charitable purposes (say, music education)? Again, we have no way to know. But if Prince had done a proper estate plan, he’d have known, but we would never know.