Deceased rock music legend Prince is becoming the next Michael Jackson in terms of estate problems. While Michael Jackson did have a valid will in place at the time of his death, there is still an ongoing argument between the Jackson family and government agencies regarding the actual value of the estate. The same issue is also happening with Prince’s estate, as heirs are potentially greatly underestimating the value of his music according to the IRS and the state of Minnesota. Of course, when the government gets involved, the actual value can also be overstated when tax revenues are attachable.
Not only are the federal government and the state of Minnesota claiming his holdings are worth much more than the heirs claim, meaning his tax bill will be greater as well, but the vault of unreleased material will potentially be valued even greater. This possible future for Prince’s unreleased compositions means the government tax people will still be knocking at the door like the Big Bad Wolf. And, it all could have been avoided had Prince considered some basic future estate planning issues and have taken action, such as placing his assets in a trust that he still could manage without the assets being subject to the probate attachment that is currently being applied.
Prince could have established a trust long ago for all of his assets and potential earnings from compositions that he clearly owned at the time of his death. He understood control of his music. What he did not understand is that he had the power to determine who and how his assets were disbursed upon his death, apparently thinking the state laws would be sufficient. State laws that are applied during a probate process rarely result in the wishes of either the decedent or their heirs. It is important for anyone of any wealth status to understand they have the power to assign their assets upon death and control what happens to those assets they have accumulated by merely consulting with an attorney who focuses on estate planning issues arising from an untimely death.
The tax burden is easily one of the most serious of estate planning issues, as Prince’s estate is set to taxed at over half of its worth between both the IRS and state of Minnesota Revenue Cabinet. The federal government tax rate is 40% while the state sets currently at 16%, which will also be applied to any of Prince’s work that ultimately is published. Troncelliti Law Associates is an estate planning law firm that can assist you in avoiding these types of estate planning issues.