Prince Doesn’t Name Heir; Civil War Ensues

“A source with firsthand knowledge of the discussions about Prince’s estate said the initial meeting between the siblings was contentious and ended in shouting.”

Once again, a celebrity has passed away without an estate plan and disaster will ensue as Prince’s estate goes through probate, the court process of passing title to his heirs.

What lesson can we non-celebrities take away from this sad example?

Tip:     Even a basic estate plan is better than no estate plan.

Tip:     Naming a personal representative is much more likely to ensure a trouble-free probate.

If Prince created even a basic estate plan, he would have determined who was in charge of the process of administering his estate.

It is important to name a personal representative (executor).  You can ensure that your most responsible family member or friend is in charge of the probate process.  A personal representative can’t change who receives what, but s/he is in the driver’s seat and can make the probate process fast or slow, expensive or reasonable, easy or difficult.  Naming a personal representative also gives the personal representative certain advantages, such as avoiding the requirement of a bond – insurance that the personal representative will not run off with estate assets – which also saves your estate money.  Lastly, if your wishes are clear, your family is much less likely to fight about what should happen.

Tip:     Without an estate plan, your assets are divided among your closest living relatives.

If you don’t express your wishes in an estate plan, the law makes its best guess.  The law sets out an order of preference for your closest relatives to receive percentages of your assets.

If Prince created even a basic estate plan, he would have determined who he wanted to get what.

Prince had six siblings, five of whom were half-siblings.  The press has said he was very close to his full sister, Tyka, who is also a musician.  It doesn’t matter.  All the half-siblings will receive shares of the estate equal to Tyka’s.  Is that what Prince wanted?  Probably not.  He may have also wanted some of his estate to go to charity, especially since the estate tax benefits would be immense.  More than half Prince’s estate will be consumed by estate tax.  Too bad.

Tip:     Without a trust, administration of your estate is public.

If you value your (or your heirs’) privacy, a trust is the way to go.  Without a trust, your assets will almost certainly go through the long, expensive, inconvenient, and public process of probate.  Anyone can walk in off the street and review your court file, finding out what you owned, what it’s worth, and who’s receiving it.

If Prince spent even a few hundred dollars on an estate plan, he would have saved his family tons of heartbreak and money.