The sudden passing of Prince left many questions surrounding his death. Weeks later, one of those questions was answered when the autopsy report revealed that Prince had died from an accidental overdose of the opioid painkiller fentanyl.
A year later, another question remains – and it could take years to find an answer. What will happen to his estate?
According to Prince’s sister, Tyka Nelson, the superstar musician died without a will or estate plan to dispose of and manage the assets of his estate, estimated to be worth $300 million. When a person dies without a will, he is said to have died “intestate.” In such a case, the state’s laws of intestacy will dictate the distribution of his estate.
For Prince, it appears his estate will be shared among his six siblings: one full sibling and five half-siblings. Under Minnesota law, half-siblings and full siblings are treated equally for purposes of inheritance. However, the legal process of properly identifying Prince’s heirs will likely be lengthy and complicated. Numerous people have come out of the woodwork to claim they are the rightful heirs of Prince. For example, one is the granddaughter of a man alleged to be the deceased half-brother of Prince. If true, she would share equally with the other siblings. Several others have claimed to be his child. If a child exists, then the siblings would be disinherited in a winner takes all scenario. An inmate from Colorado who claimed to be Prince’s long lost son surprisingly failed a DNA test. But many more claims of heirship must be resolved by the court. More than 20 attorneys representing potential heirs showed up to a hearing on June 27th to debate how probate laws interact with laws for determining parentage. Dozens of others have claimed to be heirs.
Identifying the legal heirs looks to be a lengthy process. The probate judge presiding over the case stated he may ask the Minnesota Court of Appeals to rule on some parentage law questions raised by opposing attorneys before he makes a final ruling at the probate court level. Meanwhile, other problems await, and they need to be addressed soon.
Besides determining who inherits the estate, the estate faces several other obstacles. Doug Peterson, an attorney for Bremer Trust, the company chosen to oversee the estate, told the judge that “state and federal taxes due early next year could eat up as much as half of the estate’s cash value.” The concern over estate taxes ties into a larger problem: the management of a complex business that will surely lose value if left in a state of limbo for too long. Estate taxes will be due on January 21st of next year, and if management issues are not settled well before then, the estate may be forced to liquidate valuable assets in order to meet its tax obligations. “The challenge we face is to spin yarn into gold under time pressure,” Peterson explained. “This is a dynamic, wide-ranging business, and we must keep on schedule to make the deadline. If we do not, the government will not wait. They will have a fire sale, and that is not in the best interests of anyone.”
The problems mentioned above could have been largely prevented with moderate planning. With a simple will or trust, Prince could have chosen the beneficiaries of his estate, instead of the state choosing for him. Tax planning could have significantly reduced the impact of estate taxes (it is possible the taxes could exceed $100 million). It is unknown how these taxes will impact his businesses. With the proper business planning, Prince’s companies could have continued somewhat normal operations during the administration of his estate.
“Prince was a major star and a cultural influencer, but he was a human being,” Kenneth J. Abdo, an entertainment lawyer in Minneapolis, told the New York Times. “It comes down to taking care of business. If you don’t take care of it, you’re leaving a mess to the family or the courts.”