Estate planning is not just for high asset estates
The recent passing of the musical artist known as Prince has resulted in media coverage of many aspects of his career and life, including his estate. Since Prince was so private about his personal life, some commentators assumed that he would have taken a similar approach to estate planning.
Indeed, one way to avoid the privacy invasion associated with a public probate proceeding is to establish trusts. Yet based on a recent court filing by Prince’s surviving sister, it is unclear whether Prince had a comprehensive estate plan in place, or even a will.
Specifically, Prince’s sister requested that the court appoint a special administrator for Prince’s estate, as a will has not yet been found or discovered. Even a revocable trust might have been preferable to the current ambiguity surrounding Prince’s estate. In the specific context of music, one commentator observed that a dynasty trust might have allowed the value of any unreleased music transferred into the trust principal to increase without tax implications, in addition to being classified as non-probate property. However, the search for a will and any trusts continues.
Admittedly, not even planning can guarantee the avoidance of all potential conflicts. In this case, several half-siblings, who may or may not agree with the court relief requested by Prince’s sister, also survive Prince. In addition, the IRS requires that the value of an estate be listed on an estate tax return, even if no taxes are due. If the IRS disagrees with the valuations provided by the estate, a dispute could entangle assets until the resolution of the issue. With an attorney's help, however, a proactive approach can minimize the risks of a dispute.