Everyone leaves behind an estate, including celebrities. While celebrities often have large estates with significant assets, it’s important to have plans in place regardless of the size of the estate. Without estate plans and tax planning, you could leave your loved ones in a difficult position and diminish the assets that they would receive. One celebrity has garnered a lot of attention in recent years is (The Artist Formerly Known As) Prince.
(The Artist Formerly Known As) Prince died on April 16, 2016, almost six years ago. Finally, the IRS and Prince’s estate have settled their litigation concerning its value. The final agreed amount is $156.4 million. Initially, its assets were valued at $82.3 million, but the IRS disagreed, claiming the value was $163.2 million.
The questions were centered around the valuation of Prince’s real property and his intangible assets, especially the rights to his music. The property valuations were settled in the spring of 2021. The settlement of the value of his intangible assets was announced several weeks ago.
Prince died without a will and further, without any tax planning. In 2016, the year Prince died, an individual could pass $5,450,000 free of federal tax. The value of an estate, in excess of this exemption amount, is taxed at 40%. Without getting into the weeds about tax deductions for expenses such as executor, attorney, and accounting fees, the taxable portion was probably in the neighborhood of $150,000,000. This value produces a federal tax of about $60,000,000.
We do not know the details of why Prince did not do any estate planning. But it is safe to say that his estate would have saved millions with some proactive planning.
Start Your Estate Plans Today
If you haven’t started planning for the future yet, it’s not too late. You want to have control over how your assets get distributed and for your loved ones to receive as much as possible. Knowing how to best protect your assets is difficult, but you don’t have to figure it out on your own. At MHPS, our estate planning lawyers have helped many create wills and trusts to protect their assets and can help provide the guidance you need.
Contact our estate planning attorneys today to start planning for the future.