DON'T FOLLOW PRINCE'S LEAD
|
If you care who inherits your property or how your property is handled after your death, don't follow Prince's lead.
It's been widely reported that, assuming no will or trust is found, Prince's sister and five half-siblings will inherit his estate, but not so fast. The court will have to deal with people coming out of the woodwork claiming a share. A woman named Darcell Gresham Johnston is claiming to be Prince's long-lost half-sister and entitled to a share of the estate. There's also a California man named Rodney Dixon who filed an outlandish claim that he and Prince had an implied agreement in 1995 to convey Prince's "music catalog/vault" to Dixon. Bremer Trust, the temporary manager of the estate until an executor is named, has received hundreds of calls from additional potential claimants. If you don't want a court to decide who inherits your estate, state your wishes in a will.
We also can't ignore the elephant in the room. Without an estate plan in place to minimize taxes, estate taxes will take over half of Prince's estate with the federal estate tax rate at 40 percent and Minnesota's top estate tax rate at 16 percent. Also, the fine print detail not widely-mentioned is that the estate tax will not only be assessed on his current assets (his real property, song royalties, and unreleased recordings), it will also be assessed on the value of his image and likeness. It's unknown if the estate even has enough liquid assets to pay the taxes. If not, the heirs will be forced to sell off assets to pay the tax bills. Who knows how much of Prince's estate will actually go to his family?
It's difficult to understand why Prince didn't leave a will or any kind of instruction on the future of his music or image. I remember that time in the 90's when he wanted to be referred to as "the Artist Formerly Known as Prince" during a dispute with the record label that had trademarked the name "Prince." He was obviously diligent about his business dealings and protecting the future. Why then did Prince not have an estate plan? Perhaps he thought he had more time. After all, he was just 57.
Prince's death reminds us that we never know when our time is up. The time to plan is now.
Marvin E. Blum
|
