According to the New York Times and other news outlets, the iconic performer and artist Prince (full name Prince Rogers Nelson) died without a Will and apparently without any estate plan. The news came to light on Tuesday, April 26th, when Prince’s sister, Tyke Nelson, filed a “Petition for Formal Appointment of Special Administrator” in the District Court for Carver County, Minnesota, wherein the late singer resided at the time of his death. In her Petition, Ms. Nelson states that she does “not know of the existence of a Will and [has] no reason to believe that [Prince] executed testamentary documents in any form.” In anticipation of a potentially long and cumbersome probate administration, Ms. Nelson is currently seeking the appointment of Bremer Bank, which had handled Prince’s personal and business financial affairs during his life, as a Special Administrator on an “emergency” basis for the management and supervision of Prince’s extensive business interests, which are currently without management. At the time of filing, the extent of Prince’s estate was listed simply as “unknown.”
What Happens Next?
In 2008, Minnesota adopted the Uniform Probate Code, which provides the rules for the administration of estates for those who die without Wills, known as the laws of “intestate succession.” Our blog on the laws in Massachusetts can be read here. Assuming that no Will or other estate planning documents are discovered, it is fairly clear that Prince’s siblings will inherit the bulk of his probate estate as set forth in the Code.
The real concern now for Prince’s heirs, creditors, and anyone with an interest in his estate (and for fans concerned about the management of his legacy), will be the proper administration of his estate. Generally, the first order of business addressed by a Will is the appointment of a Personal Representative to take charge of and administer the estate. For this reason, a Personal Representative should be chosen with great care. In the absence of such an appointment, the Code provides a priority ladder of persons entitled to serve as Personal Representative. When, as here, there is no Will or surviving spouse, the decedent’s “other heirs” are entitled to serve. Therefore, the estate could be faced with competing claims of Prince’s siblings to the position, which the District Court will ultimately have to determine. This process will be a matter of public record.
In the interim, Ms. Nelson seeks the appointment of Bremer Bank as Special Administrator, whose authority may be subject to limitations imposed by the Court and on-going Court supervision.
All of this is to say that there will be substantial costs for Prince’s estate to sort out even the most basic aspects of administration. While it appears that these costs can be borne by the Estate (the Times reports that Prince has sold 650,000 albums since his death, and the Star Tribune reports that Prince, through various entities, owned 16 properties), the real tragedy of Prince’s lack of planning is the public scrutiny this process will generate for an individual who so closely guarded his privacy in life. Simple planning, including a basic Will and the use of irrevocable trusts, would have ensured that most of these matters remained private.
Lastly, Prince’s apparent lack of planning will likely result in a large Federal estate tax. In 2016, the Federal estate tax rate is 40 percent of assets in excess of 5.43 million for an unmarried individual. With many observers estimating Prince’s estate to exceed $100 million, the first order of business for the Estate’s Personal Representative will be to plan for payment of the impending tax bill.