A lesson, from Prince to you

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The fight for Prince’s estate has begun. Prince Rogers Nelson, the artist known as Prince, died in his home on April 21, 2016. During his life, the musician sold 100 million albums, with the album “Purple Rain” topping the list. His earning potential does not stop with his death. If his estate follows the pattern set by Michael Jackson, the money may continue to roll in.

It is estimated that Prince’s estate is worth some $300 million. People with those kinds of assets almost universally have elaborate estate plans in place. However, Prince’s sister, Tyka Nelson now claims that Prince had no will and no estate planning in place. In other words, Prince had not designated the disposition of his assets upon his death. Even though he had no will,  Prince’s assets will still need to go through probateProbate is the legal process by which the assets and liabilities of a person are resolved after they die.  After valid creditor claims are paid, the remaining assets are distributed according to the terms of a will, if there is a will.  Probate occurs in state court.  All of the records are public.  For this reason, many people choose to set up trusts to pass along their wealth.  Prince’s estate, however, will be open for all to see as a matter of public record.

The lesson: Don’t die without a will

When a person dies without a will, they are said to have died intestate.  Prince died intestate.  In intestacy, state statutes determine who gets the property of the estate.  Prince doesn’t get to decide where his estate goes because he failed to execute a will.  His wishes may have been very different than the intestacy statutes.  Prince was generous to charities during his life.  He may have wanted a portion of his estate to go to certain charities.  That can’t and won’t happen now.

Every state has intestate laws, and they vary from state to state.  Generally, however, they favor family members in this priority:  spouses, children, parents, siblings and sometimes cousins.  If there are no family members that qualify to inherit under the intestate statutes, the entire estate goes to the state.  This is called escheat.  It is very rare.
Prince left behind a complicated family, which will likely result in litigation.   Both of Prince’s parents have passed away.  He has one full sister and several half-siblings and no publicly acknowledged children.

From the Daily Mail (UK):

Heir hunters are investigating a ‘legitimate’ claim against Prince’s $300million estate by a man who says he’s the singer’s secret love-child, Daily Mail Online can reveal.

The ‘love-child’, a man in his 30s and from Prince’s home state of Minnesota, is believed to be the product of a fling the Purple Rain singer had with an as yet unknown woman in the mid-80s.

Of course, with an estate this big, it is likely that others will step forward claiming to be Prince’s love child.  Anyone claiming to be Prince’s love child will need to establish paternity before they can qualify to inherit anything from the estate.  Normally, paternity is assumed where a man is married and his wife gives birth or where the man acknowledges the child as his own.  There is no known document where Prince acknowledges any children.  Therefore, any “love child” will need to petition the Court to establish paternity. This would be done through a DNA test.

The lack of planning will also likely have severe tax consequences. The federal government collects an “estate tax” on every dollar above $5.4 million.   Like the income tax, the estate tax is progressive. The top rate is 40%. Prince’s estate will likely pay the federal government tens of millions of dollars in estate taxes.  Much of this could have been avoided with proper estate planning.

The estate may also face individuals who are claimed they are owed money or that Prince gifted them would-be estate assets.

From CBS Minnesota:

A California man has already filed and said he’s the rightful owner of Prince’s music because he and the singer had a verbal agreement dating back to the ’90s. A judge will have to sort out those claims and determine which ones are legitimate, if any.

These individuals will have a limited amount of time to step forward.  Creditors have a very short period of time to make their claims.  Those who claim property was gifted to them, such as the California man, above, will need to act quickly to protect their rights.

Estate litigation is not uncommon, even where there is a plan in place.  However, litigation over this type of estate is extremely rare.  It’s unusual to have an estate of this size, with such a complicated family where there is no will.  The only other comparable case would be the Estate of Howard Hughes.  The Hughes estate litigation is unquestionably the most infamous estate battle of all-time, and it occurred right here in Clark County, Nevada.  Like Prince, Howard Hughes died without a will or childrenLitigation over the Hughes estate took over two decades to resolve.

Prince passed away only a couple of weeks ago.  It is entirely possible that someone may step forward with a purported will.  In Howard Hughes’ estate, an obscure man named Melvin Dummar claimed to have a will executed by Howard Hughes.

From the Deseret News:

Dummar’s story always did seem like something Hollywood dreamed up. He claims that while driving through rural Nevada one night in December of 1968, he pulled onto a dirt road to answer the call of nature.

He says he found a scraggly, bearded man lying injured in the desert. Dummar drove the stranger to Las Vegas and did not believe it when the man claimed to be Howard Hughes.

In 1976, when the real Howard Hughes died, he was the most famous billionaire in the world. The question of who would get his money became an international guessing game. When a handwritten will was discovered in Salt Lake City, it created a worldwide sensation.

The document became known as the “Mormon Will” because someone had mysteriously dropped it on a desk in the headquarters of The Church of Jesus Christ of Latter-day Saints. The purported will divided the Hughes estate into 16 equal shares, with one share designated for the LDS Church itself and another sixteenth for “Melvin DuMar.”

A trial was held and ultimately, the “Mormon Will” was rejected by the Clark County District Court. There is a strong incentive for grifters to step forward with a forged will in Prince’s estate, in hopes that the Court will accept it.  If anyone steps forward with a purported will signed by Prince, there will almost certainly be protracted litigation over the authenticity of the document.  Again, this all could have been avoided through proper planning.

Given the unusual nature of Prince’s estate, family and absence of estate planning, there are likely many twists and turns ahead. The process will be long, drawn out and expensive.  Surely, this is not what Prince would have wanted. It’s not what anyone would want. Prince could have avoided this mess with a thorough estate plan.
Author: Thomas R. Grover

Photo: Kevin Winter/Getty Images North America


About Thomas R. Grover

Thomas R Grover rz. Thomas R. Grover is a litigator with the boutique estate litigation

and estate planning law firm Goodsell & Olsen, LLP.  He can be reached at 702-900-3003 or tom@probate-in-nevada.com.