As I discussed in my previous blogs (Prince’s Estate Plan)(Prince’s Unlikely (and possibly, Unwanted) Heirs) Prince’s lack of Estate Planning teaches us the following lessons:
How to let the IRS become family…
Prince’s lack of Estate Planning is making the Internal Revenue Service his primary beneficiary, an unnamed heir, if you will. The IRS is going to take up to .40 cents on the dollar in Estate Taxes above the amount of the Estate Tax Exemption ($5.45 million dollars). It’s unlikely that he would have chosen the IRS as his primary beneficiary (“We’re from the Federal Government and we are here to help”).
Estate Taxes are a voluntary tax. They can be planned around in a myriad of ways. Prince was known for quietly supporting a number of charities. After your death would you rather leave some of your money to a charity who will do good with it or leave it to the IRS who gives it to the black hole of waste in Washington D.C?
Don’t reward people you wouldn’t want to reward.
People who will inherit his hundreds of millions of dollar Estate are people he has a past history of conflict, lawsuits, Restraining Orders and not having seen them for over a decade or more (Prince’s Unlikely Heirs). Some of these shirttail relatives are not likely people he would intentionally name as beneficiaries and reward with the income of his musical efforts and talent.
Proper planning could have helped avoid drama, unnecessary costs and drawn out litigation.
Probate Court could have been avoided. Leaving no Estate Plan is going to cause years of frustration, litigation and cost in Probate Court. Already one unknown man in a penitentiary has filed a claim in Probate Court claiming to be an heir. Such claims are likely to be coming out of the woodwork. The years of frustration and the wear and tear of litigation will eat up much of the Estate. That’s on top of the millions of dollars that will go to the IRS and the tax authorities in the State of Minnesota. Probate Court could have been avoided with good Trust based Estate Planning.
Reward the people and charities you truly care about.
Great things could have been done. With good Estate Planning, Estate Taxes could have been avoided or zeroed out. Monies could have been left for his loved ones and friends in a protected manner that they could not lose by squander, in a lawsuit or through divorce. Dramatically good things could have been done for people and purposes through charity. Apparently charities were a part of his life and could have been a huge part of his legacy. Monies could have been invested, grown, and paid out over time in charitable vehicles like Private Foundations, Community Foundations or Charitable Trusts. All of these could do great works for great periods of time including in his beloved home town of Minneapolis, Minnesota.
Don’t lose your “Life’s Work™”
Collecting and Protecting Prince’s Music is likely to be shattered. As I said before (Prince’s Estate Plan) Prince spent years and hundreds of thousands of dollars in litigation in gaining control and protection of the music he has written. His Estate is now being left to at least eight (8) different relatives that he may or may not have been connected with, and had previously been in conflict with (Prince’s Unlikely Heirs). It’s likely these people will cannibalize his music and sell it to the highest bidder. They are not likely to have the same interest he would have in protecting his music legacy.
Don’t waste your last strategic move.
Prince’s lack of Estate Planning was tremendously contradictory to his precise and organized business dealings during his lifetime. He was strategic when it came to his music business. Instead, the lack of planning created chaos and wasted much of his lifetime of work.
- The IRS could have been avoided as his #1 primary beneficiary.
- The Estate Taxes could have been eliminated or zeroed out.
- Money could have been left in a Legacy Design that would have run for generations to provide for his loved ones in ways that could not be squandered, lost in a divorce or car wreck lawsuit.
- Dramatically good things could have been done charitably over time so that Prince’s Charitable Legacy could have lasted for decades, if not beyond.
In the end, Prince is becoming known for the negative consequences of not having proper Estate Planning as much for his musical talent. No one wanted that, least of all, his fans.
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At the Law Firm of Steven Andrew Jackson, Attorney and Counsellor at Law, we have helped hundreds of families protect themselves and their loved ones, avoid Estate Taxes and Probate Costs, and keep their Estate Plans current with the law through The Customized Protective Estate Planning Solution™.