I never meant 2 cause you any sorrow
I never meant 2 cause you any pain
I only wanted 2 one time see you laughing
I only wanted 2 see you laughing in the purple rain
His family is likely wondering why he didn’t create an estate plan and not only defer millions of dollars of taxes – but make things much less painful.
As Yahoo Finance notes, “Between the current federal estate tax rate of 40% and an additional 16% from the state of Minnesota, the majority of Prince’s estate is going to the Tax Man. Needless to say, there is much that could have been done to avoid probate and minimize estate tax.”
For an estate valued at over $300 million, that’s a significant chunk of change going to the government – and not Prince’s family. It’s also surprising, as Forbes’ Winnie Sun noted: “Prince had a reputation in the legal world of being very hands on in his legal affairs. He went through numerous lawyers handling his affairs.”
This opens all sorts of paparazzi-level drama possibilities. For instance, he has no heirs listed and his family knows of none, but if someone had some sort of proof they were his child, then that person could be in line to inherit everything.
So, what could he have done differently?
First, actually establishing a plan would have helped his family avoid probate. This time-consuming process, even if done without conflict between family members, is still painful going through many details. It also brings higher attorney’s fees, because the lawyers must create and submit affidavits, family tree, certificates, and more to the court.
Then, there’s usually months (with South Carolina requiring at least 8 months) for the court-appointed Executor to determine what assets there are. And with someone with many assets like Prince, it will take the Executor plenty of effort to have a complete list, replete with song royalties and much more. A last will and testament still must go through probate, but the specific instructions would speed up the process and also keep many of the assets out of the public eye. And it prevents much of the drama that could occur.
Second, using trusts to designate funds for specific people and purposes could have kept plenty of the $150 million-plus dollars within the family or a cause he cared deeply about. And trusts could have entirely avoided probate. From a revocable trust to special provisions that can be written, much of the money could’ve had instructions attached to take away the guesswork and keep much more of it out of the government’s hands.
You don’t need to own a multi-million dollar estate to warrant an estate plan. A significant percentage of your belongings, no matter the total value, could go to the government upon your passing without a plan in place. And from simple plans to complex, multi-faceted arrangements, we’ve done them all and are ready to help.