Prominent Virginia Attorney Comments on Prince’s Lack of Estate Planning
Jun 23, 2016
Fairfax, VA (Law Firm Newswire) June 23, 2016 – Given the disclosure that pop music icon Prince left no will, there has been a renewed interest in estate planning.
His lack of estate planning demonstrates the importance of creating a will, or even a trust if privacy is important to the grantor. What is most surprising is the fact that Prince missed an opportunity to continue to engage in philanthropy and in discovering methods of releasing artists from restrictive recording contracts, two issues that were important to him. Instead of leaving his estate to his siblings, charities or other beneficiaries, his estate will have to go through probate.
By creating a charitable remainder trust, the grantor can reduce estate and income taxes, and the charity will receive trust assets after the death of the grantor. Establishing an estate plan can also serve to avoid any challenges to the estate by family members or others who claim to have been promised an inheritance through an oral contract.
“The lack of estate planning on the part of Prince underscores the importance of creating a will and a trust so that the wishes of the grantor with respect to the disposition of assets are carried out,” said prominent Vienna, Virginia, estate planning attorney Lisa McDevitt.
In light of his death, there is likely to be a prolonged dispute between the government and the estate over the value of intangible assets. They will have to determine just how much of the estate will be subject to tax. According to Richard Behrendt, director of estate planning at Annex Wealth Management, it will be challenging to place a value on Princes’s future royalties. Charlie Douglas, board member of the National Association of Estate Planners and Councils, and a wealth adviser in Atlanta, said they are attempting to view the present value of a future income stream.
It was reported that Prince earned a fortune that is valued at approximately $300 million. However, there could be a discrepancy between the Internal Revenue Service and Prince’s estate regarding the present value of future royalties. That is because following the death of a popular artist, there is likely to be a huge increase in popularity and thus, a significant rise in valuation of the assets belonging to the artist.
The estate of the late pop star Michael Jackson is currently embroiled in a court battle with the IRS, which estimated the value of the name and image of Jackson following his death at more than $434 million. The valuation by the estate was $2,015.
According to Behrendt, the IRS thinks it was cheated in the case of the estate of Elvis Presley because it did not expect the popularity of the rock star to increase to such a great extent posthumously. In 2015, Elvis earned $5 million, which represents the second-highest income for a deceased celebrity. Michael Jackson, who had earnings of $115 million, was first on the list compiled by Forbes. Inasmuch as a collection of the recordings by Prince have not yet been released, the value of that body of work is unknown.
Learn more at http://www.mcdevittlaw.net
Lisa Lane McDevitt
2155 Bonaventure Drive
Vienna, VA 22181