As we have discussed in previous blog posts, Prince’s lack of estate planning has already resulted in a public court proceeding and millions in attorney fees. In addition to the special administrator managing Prince’s estate, the next unintended beneficiary to receive a major payout will be the U.S. Government. As discussed in Forbes, out of Prince’s $200 million estate, the government will receive more than half; a 40 percent federal tax and 16 percent tax in Minnesota. The remaining assets will be distributed to Prince’s heirs after a lengthy court proceeding. Obviously, Prince did not intend for the majority of his estate to be eaten up in taxes and attorney fees with the remaining balance simply split up equally between his siblings. Unfortunately, he left no estate plan at this death.
There are multiple estate planning strategies that Prince could have utilized to prevent such a costly mess such as reducing the value of his assets subject to taxation, gifting to charity and using a trust to avoid probate court. Luckily, you can learn from Prince’s mistakes, if you do not have an estate plan like a will or trust, contact an estate planning attorney today. Just because your estate won’t be worth $200 million, doesn’t make estate planning any less important for your loved ones.