Prince may not have had a will. Don’t let this happen to you
The Artist Formerly Known as Prince, aka Prince Rogers Nelson, died on April 21, 2016, purportedly without a Last Will and Testament, or any estate plan, in place, according to documents filed by his sister Tyka Nelson in the probate division of a Minnesota District Court. If that proves to be the case, Prince joins a line of celebrities including James Dean, “Sonny” Bono, and Pablo Picasso, who died with significant estates, and no known estate planning in place. These popular examples serve cautionary tales as to the importance of basic estate planning. If the unexpected can happen to a celebrity, it can happen to you.
People often state that they do not need a Will, because “the kids will get it all,” or, as they say with spunk, “They can fight over it when I’m gone.” Indeed, procrastinating over the execution of a Will can often lead to estate contests, where little is left for the heirs after the battle is fought in the probate court. Rarely does a person truly prefer to leave his or her life’s savings to the lawyers rather than their heirs. Often people are misinformed as to the laws of intestacy, the rules that apply when one dies without an estate plan in place.
Under Maine law, if a person dies intestate, a surviving spouse is only entitled to the entire probate estate if there are no surviving parents or surviving issue of the decedent. 18-A M.R.S. § 2-102(1). If the decedent leaves a surviving parent or parents, or issue, all of whom are also issue of the surviving spouse, the spouse is entitled to the first $50,000 and half of the remaining estate. 18-A M.R.S. § 2-102(2)-(3). If the decedent left surviving issue who are not the issue of the surviving spouse, the spouse is entitled to half the estate, and the surviving issue receive the remaining half. 18-A M.R.S. § 2-102(4); 18-A M.R.S. § 2-103. “Surviving issue” refers not just to children, but to all “lineal descendants of all generations,” which can include grandchildren and great-grandchildren, where their parents predecease the decedent. 18-A M.R.S §1-201(21).
Where a person may think that the spouse or the children will “get it all,” that very well may not be the case. Additionally, distribution of an estate in fractional shares typically proves difficult where real property or nonliquid assets are left for division. Estate contests erupt where potential heirs were “promised” assets by the decedent, but the decedent never documented such intentions in a simple Will. Even had Prince intended his reportedly ample estate pass to his surviving sibling and half siblings, a Last Will and Testament would likely save thousands of dollars in legal fees to determine the proper heirs and their proportionate shares of his estate.
Notable celebrity estates of high net worth have the added problem of estate taxes. While the current Maine and federal estate tax exemption amounts of $5.45 million eliminate this problem for many Maine estates, lack of tax planning can cost estates 40% or more of their net worth, lost to estate taxes. Prince was apparently an avid, though quiet, philanthropist. With good planning, much of the assets that will be paid in estate tax could have gone to charities that supported his social causes.
When a Last Will and Testament is filed for probate administration in Maine, it becomes a public document. Testators seeking privacy for the final disposition of their assets would benefit from a trust, which can remain private, not accessible for public review. In addition to privacy, a trust can provide tax planning, extended control over assets for young or financially irresponsible beneficiaries, and for charitable devises.
There are innumerable reasons people do not put an estate plan in place. The process of considering how your loved ones will be cared for after your death can be unsettling and difficult. We do not like to think about our death, however impending it may be. People do not like to make decisions that may result in hurt feelings among their heirs, or confront longstanding dysfunction in families. It can be overwhelming, and is easily a task put off for another day, or a more urgent health crisis. However, the time, cost and difficulty of making such decisions pales in comparison to the time, cost and difficulty the heirs will face in dividing a contested estate.
Estate planning can be most important in planning for the unexpected, untimely death. Yet nothing is more certain than death. A good estate planning attorney can make a difficult thought process a considered, deliberate process, to ensure your family and loved ones are provided for, document your articulated intentions, and save them legal difficulties and expense when they are already suffering the emotional trauma of your death. A small investment of time and money into a basic estate plan can save your heirs years of litigation and thousands of dollars in legal fees, while ensuring your estate passes as you truly intend, and allowing you not only to rest, but to live, in peace.