Early reports tell us that the late musician Prince died without a will.
Therefore, Minnesota “intestacy” statutes (i.e. statutes govern estates of decedents dying without a will) are going to control the administration of Prince’s estate. In a legal petition filed on April 26, 2016, by Prince’s sister, Tyka Nelson, Ms. Nelson stated that she did not know of the existence of a will signed by Prince. Because of this, no person currently has the legal right to act on behalf of his estate (such as a personal representative, executor, or trustee). In the petition, Prince’s sister asked a Minnesota probate court to appoint Bremer Trust as the “special administrator” of Prince’s estate. Under the applicable statutes in Minnesota, a special administrator has the legal authority to act on behalf of an estate in much the same fashion as a personal representative or executor.
In the coming months, it is likely that more information will emerge about Prince’s estate and the assets compiled by this intriguing artist. The special administrator will likely face of number of challenging questions, including:
- Who is entitled to inherit Prince’s estate? While Tyka Nelson is Prince’s only full sibling, her petition names five “half siblings” as well. Under Minnesota statutes, half siblings are entitled to the same share of an intestate. If other half siblings are discovered, they will also be considered equal heirs of Prince’s estate.
- How will Prince’s estate and ongoing business interests be managed? Prince’s estate includes extensive holdings of the rights to the songs he wrote, many of which have never been published or released. As we have seen with celebrity estates of Elvis Presley and Michael Jackson, the artist’s ongoing music sales and other intellectual property continues to have considerable value. Reports indicate that 1 million of Prince’s songs and 231,000 of his albums were sold on the single day in which Prince passed away.
- How will Prince’s estate be valued for estate tax purposes? While the executors of Michael Jackson’s estate reported an initial value of $7 million for Mr. Jackson’s estate, the Internal Revenue Service has valued Mr. Jackson’s estate and lifetime taxable gifts of approximately $1.178 billion (yes, that is billion with a “b”). The matter is currently in a disputed case before the United States Tax Court. For iconic celebrities such as Prince, the artist’s mere “name and likeness” will likely be a separate and independent asset of the estate having significant value. Like the intangible goodwill of an ongoing business, an artist’s name and likeness has the potential to produce significant income in the future.
“Electric word life. It means forever and that’s a mighty long time. But I’m here to tell you, there’s something else. The after world (and taxes).”
~Prince. Let’s Go Crazy (as respectfully modified by a humble lawyer).
