The Prince estate may finally be finding resolution.
The death of a celebrity often brings with it a sense of shock.
Few people watch a movie or listen to a song and think about how the artists will eventually die.
Although some celebrities live long lives, others die suddenly and tragically.
This was the case with musician Prince.
According to a recent Yahoo! News article titled “Minnesota probate court set to discuss ‘final distribution’ of Prince estate in February,” his estate was not prepared for his passing.
When Prince died in April of 2016, he did not have an estate plan in place.
For this reason, his estate has been entangled in the Carver County probate court for nearly six years.
Although the value of his estate is estimated to be more than $100 million, it has lost tens of millions of dollars in administration fees.
The probate court has finally settled on dividing the estate between the music company Primary Wave and the three oldest of the eldest six of heirs of Prince or their families.
Why is Primary Wave an heir?
The music company bought out most of the interests of the youngest three siblings of Prince.
One of these siblings died in August 2019.
The offer from Primary Wave was rejected by three of the older siblings.
One of these siblings died in September 2021.
The IRS and the state of Minnesota have disagreed with the Prince estate administrator, the Comerica Bank and Trust, about how to value his assets.
In 2020, Comerica valued his estate at $82.3 million and the IRS valued it at $163.2 million.
Because of the significant difference, the IRS applied a $6.4 million “accuracy-related penalty” to the estate and the estate sued the IRS in the U.S. Tax Court for making calculation mistakes.
The tax court trial has been canceled but both parties must file status reports on the case by February 2022.
Although the IRS and the Comerica Bank and Trust have come to an agreement on the value of the Prince estate, the Carver County probate court must approve the agreement.
With the IRS settlement, the Prince estate can move further through probate.
Even so, this could still be a long process.
What can you learn from Prince?
Work with an experienced estate planning attorney to create an estate plan now.
Otherwise, you will leave your loved ones with a mess whether you are worth millions or not.
Reference: Yahoo! News (Dec. 22, 2021) “Minnesota probate court set to discuss ‘final distribution’ of Prince estate in February”