As pretty much the entire world knows by now, Prince Rogers Nelson (better known simply as “Prince”) died on April 21, 2016. Lauded for his brilliant talent as a singer, songwriter, and multi-instrumentalist, Prince will be remembered and written about for a long time.
Today, however, I write about Prince for a different reason: according to documents filed by his sister in Minnesota probate court, he died without a will or any other estate planning documents. If true, this fact is somewhat shocking considering that Prince’s estate is estimated at approximately $300 million dollars and contains a complex list of assets including intellectual property, numerous real estate holdings, artwork, memorabilia, and other unique items.
On the national news, one theory put forth by an attorney representing one of Prince’s half-siblings and presumptive heirs (he died without leaving a spouse, children, or parents) is that he intentionally did not do an estate plan, as this would somehow force his siblings to work together through the probate process to determine the distribution of his estate. In my opinion, that is a VERY risky strategy in this case, let alone for anyone else, as it does not promote efficiency from a time or cost-savings perspective, nor does it provide any assurance that his estate would be distributed as he would want.
Dying without a will is referred to in Michigan and other states as “dying intestate”. When this occurs, the applicable intestate statute is applied to govern the administration of the estate. In Michigan, the process for determining one’s heirs basically follows that person’s vertical line of descent. That is:
• If you do not leave behind a living spouse, then the estate passes to your descendants (i.e. children, grandchildren, etc.).
• If you do not leave behind any living descendants, then the estate passes to your parents.
• If you do not leave behind any living parents, then the estate passes to your parents’ descendants (i.e. siblings, nephews, nieces, etc.).
• If you do not leave behind any of living descendants of your parents, then the estate passes to your grandparents and your grandparents’ descendants (i.e. uncles, aunts, cousins, etc.).
**Please note that there are also special rules for mixed families (i.e. different children from different marriages), adopted children, stepchildren, etc. that may require split shares for the surviving family members.
I mention the mechanics of Michigan’s intestate statute because the distribution under the law often times does not mirror a client’s wishes. In this case, barring differences in each state’s laws, the same basic rules would apply to you as it would to Prince or any other multi-millionaire.
So at a minimum, I recommend that EVERYONE have a will, a financial power of attorney, and a healthcare power of attorney in place. This package of documents is not expensive and can save you (before death) and your loved ones (after your death) a lot of stress. A revocable living trust or other type of trust may also make sense to add to your estate plan if you wish to avoid probate, maintain control over your assets after death for the purpose of delaying or limiting distributions to your loved ones, attempt to avoid estate tax, and a variety of other reasons.
If you have any questions or would like to discuss starting (or changing) your estate plan, please do not hesitate to contact me.
