Learning from Estate Planning Mistakes

Midsection of businessman signing house contract at office desk

 

 

Although we are several months removed from the tragic death of the beloved artist, Prince, the question of his estate will be one that will remain for some time. Prince's estate was worth more than $300 million, but he did not have a will, which means his relatives will have a long and expensive battle on their hands as they try to sort everything out. Here are several things that will need to be sorted out:

 

Paying the Taxes on the Estate

 

Prince's estate will be subject to the current estate tax rate of 40%. This is in addition to another 16% that will go to the state of Minnesota. This means that a majority of Prince's estate will be going to the government. Prince was famous for distrusting legal and financial professionals. Because of this, before anything is sorted out, these tax payments will need to be made.

 

Figuring Out Who His Heirs Actually Are

 

In addition that, because he did not create a will, there will be a battle over who Prince's heirs actually are. Multiple news reports have come out about people coming forward saying that they are Prince's children. Each case will be subject to a paternity test. This will be in addition to family members who will have a stake in his fortune as well. If Prince had drawn up a will, a lot of this mess may have been avoided.

 

Prince was not alone in his distrust of legal and financial professionals. Multiple deceased artists, from Tupac Shakur to Bob Marley, did not create a will for a variety of reasons from distrust to just thinking they were too young. The end results have been embattled estates where the majority of the money either went to the government or legal professionals in charge of advocating on their representatives' behalf.

 

Their stories should provide sufficient evidence that it's important to have a will in place – no matter the size of your estate. Your family members and friends should be protected and not worried about who is entitled to what. Therefore, you should speak to estate attorneys who can provide information on estate planning and ways to reduce your overall tax bill. By avoiding mistakes by those who did not plan accordingly, you can make sure your estate is taken care of in the event that an unfortunate event does occur.

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