3 Big mistakes prince made before he died
Prince provides a cautionary tale for why everyone needs an estate plan.
It is hard to overstate how important it is to have a will or some other estate planning document. But even famous celebrities like Prince get this wrong sometimes. Like more than half of all Americans, Prince failed to have a will in place when he passed away in 2016. His failure to clearly state his last wishes have caused heartache and confusion for his family and cost thousands of dollars in unnecessary estate taxes and legal fees. His experience is a cautionary tale for everyone on the importance of working with an estate planning law firm (like SnapWills) to make a will or trust.
Specifically, Prince made 3 big mistakes by not having an estate plan:
- Not protecting his assets from poor management
The administrator of an estate has broad power to manage and distribute assets. Needless to say, that power in the wrong hands can be devastating to an estate and leave heirs with nothing. And when no will is in place, a court is allowed to choose whomever they want to manage the assets of an estate. In Prince's case, his surviving family is suing the court-appointed administrator because of alleged mismanagement of assets. Prince could have avoided this alleged mismanagement and the trouble to his family by thinking long and hard about who should have managed his estate and memorializing that decision in a will or trust document.
- Not transferring assets to his intended heirs
When someone passes away and no will is in place, a court-appointed representative is required to distribute assets according to a strict, inflexible schedule that is mandated by statute. If you want to leave specific items to particular beneficiaries or if you want to give your administrator flexibility, you must have a written estate plan in place that says so. Since Prince did not have a will in place, there is great debate about how to manage and distribute his assets.
- Creating costly and unnecessary fees and taxes for family members
Because of the controversy around the management and distribution of Prince's estate, Prince's family has had to pay a large amount of legal fees. And because there is no trust instrument in place (which can be used to reduce estate taxes), Prince's estate will likely need to pay even more in estate taxes. With just a little estate planning, Prince could have avoided these fees and may have been able to reduce his final tax bill.
To avoid these mistakes yourself, take the time to speak with a SnapWills attorney and create a personalized estate plan.
Disclaimer: This article is for informational purposes only and does not constitute legal advice or form an attorney-client relationship.