Learn from Prince’s Mistakes: Don’t Let it (Purple) Rain on Your Estate Plans
by Mary Ellis Patton
When I read that Prince failed to leave a will or any known estate planning documents, I was shocked. The musician, who was notoriously hands-on with his music and its management, failed to prepare a plan for what would happen after his death. Prince left behind an estate estimated to exceed $300 million. While most of us will never accumulate that much money, we can still learn from Prince’s mistakes.
1. POWERS-OF-ATTORNEY
Did Prince name an agent under a Durable Power-of-Attorney? It is unknown right now, but this could have provided him with some options at the end of life.
Powers-of-Attorney are the only estate planning documents that truly operate during your lifetime. Loved one’s can use these powers to assist you for your convenience or to aid you with crisis planning at the end of life.
You do not need to be elderly or have significant assets to get a POA. This document can help in so many different situations -- from health care decision-making to paying bills and communication with your bank. It is one of your most important legal documents.
2. LAST WILL AND TESTAMENT
Prince did not have a Will. A Will is the document that directs the disposition of assets that you own at the time of death. Prince owned rights to all his music and allegedly has a secret vault of unreleased recordings in his home, Paisley Park. The fight over how to divide these assets between his siblings will be intense. Which one of them will get the rights to “Purple Rain” or “When Doves Cry”?
Prince could have specifically left all or some of his assets to named persons. Because he did not choose himself, his estate will be distributed under Minnesota Intestacy law.
A Will also nominates a person to oversee your estate. The court recently appointed Prince’s Bank, Bremer Trust, to handle the estate. This may or may not be who Prince wanted to oversee the estate, but he failed to leave any instruction behind.
3. TRUSTS (REVOCABLE OR IRREVOCABLE)
Trusts are not for everyone. However, if Prince had been my client, I would have recommended a Trust. In his case, a Trust could have controlled how and when the assets were distributed. He could have provided a steady stream of income for his siblings for their lives, while giving large portions of his estate to charities that he supported during his lifetime. These funds could have been protected from the beneficiaries’ creditors, made provisions for minors who may inherit, and protected beneficiaries who are receiving government benefits. A trust would have provided some security for the future of his money.
4. KEEP YOUR PLANS UPDATED
Review your estate plans every two years. Laws change and your financial picture may change. Additionally, you need to review your plans after any major life event (divorce, death, birth, or large windfall of money). Consider having your estate planning documents redone every five years in order to keep them current with the newest laws and estate planning recommendations.
If you have not done any estate planning or your documents are several years old, contact us for more information.