Tragically, when Prince died on April 21, 2016 of a fentanyl overdose, he died without a will in place. For anyone, this lack of planning creates complications. But for someone like Prince, who has extensive assets including intellectual property, the failure to plan can create an enormously expensive and complicated mess in terms of the estate’s administration.
A recent article in the Los Angeles Times, entitled “IRS says executors undervalued Prince’s estate by 50%,” sets forth a nightmarish tale of what can happen without proper planning:
The Internal Revenue Service determined that Prince’s estate is worth $163.2 million, double the $82.3-million valuation submitted by Comerica Bank & Trust, the estate’s administrator. The disparity primarily involves Prince’s music publishing and recording interests, according to court documents.
Documents show that the IRS believes Prince’s estate owes another $32.4 million in federal taxes, roughly doubling the tax bill based on Comerica’s valuation, the Minneapolis Star Tribune reported.
The IRS also has ordered a $6.4-million “accuracy-related penalty” on Prince’s estate, citing a “substantial” undervaluation of assets, documents show.
The article also describes the heirs’ unhappiness because “the estate has doled out tens of millions of dollars to lawyers and consultants.” And no end appears to be in sight, as litigation ensures over the valuation issues.
Few people will have estates that are as complex as Prince. But almost everyone has their own set of complexities, that might include some combination of the following:
- minor children
- adult children who need special assistance due to disability
- real properties in other states
- family members that they dislike
- a dissolution process that has yet to be finalized
- a taxable estate
- intellectual property issues
- difficulties in identifying an appropriate personal representative
- ownership of a business
- a blended family
- people who owe them money
- a committed intimate partner who believes they have a partial interest in the estate
The list goes on. You don’t have to be Prince to have your estate “dole out” plenty of money in attorneys’ fees for estate administration – likely much more than would have been the case if you had proactively worked with an attorney to develop a solid estate plan to address your particular needs. If you’d like to discuss this work with us, we’d be happy to help.
This post is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting with an attorney.