Prince of his Estate?
When Prince passed away prematurely, he left behind an estimated $300M estate that included several high-end real estate holdings around the globe, song and movie royalties, along with many unreleased songs. Prince also died single, childless, and intestate, which means “without a will.”
As a result, the complex process of resolving his estate and distributing the net assets has fallen to the Federal and State probate courts. Ironically, despite having no wife or children, 36 potential “heirs” have laid claim to Prince’s estate; and it will likely take years to sort out. Several of these potential heirs will also undergo genetic testing to validate their claims.
Quite simply, everyone should have a thorough and coordinated estate plan; and it’s never too early to create one. Why? Probate fees can skyrocket: appraisal costs, executor’s fees, court fees, legal and accounting fees, and surety bonds can reduce your estate value 3% to 8%.
But probate costs and invasion of privacy are only part of the story! Lack of a will and proper planning also most likely mean higher state and federal taxes. In the case of Prince, the attorneys for the firm overseeing his estate estimated that Prince’s tax bill and fees could amount to almost half the value of his entire estate, or around $150 million. As a result, Prince’s estate will probably have to liquidate some real estate holding and sell the rights to a number of his unreleased and released music, probably at a discount to true value.
Why the reluctance to avoid calamity?
A 2015 online survey by Harris Poll revealed that 64 percent of Americans still don’t have a simple Will or estate plan. How can this be? One of the most common reasons for the lack of an estate plan is “I don’t think I need one.” Even if your own wishes aren’t a priority to you, at minimum you should want to make sure you don’t leave a disorderly financial mess behind for your loved ones. At Lineweaver Financial Group, we believe regardless of your net worth, everyone should have a proper estate plan that identifies distribution of bank accounts, retirement accounts, family heirlooms, personal possessions, avoids probate, and provides guidance to the next generation. Without a proper estate plan, a court may distribute your estate in a manner that is not in accord with your wishes or family’s needs and you could also expose your loved ones to unnecessary tax liabilities and extraordinary fees.
Where to go?
Certainly there is no shortage of professional specialists willing to act as estate advisors. Attorneys, accountants, insurance agents, stock brokers, private bankers, and others can all be valuable players. But it’s only natural that each of these professionals will make recommendations most familiar to them. These different strategies might all be worth looking into, as no two estate situations are exactly alike. In our opinion, intelligent estate planning requires the use of a qualified, experienced advisor who is going to create, communicate, coordinate, and monitor the proper estate planning strategies between yourself and other relevant professionals. We call that advisor a “Financial Quarterback.” Their role is to insure your entire professional team works effectively and efficiently to develop and monitor a worry-free estate distribution plan.
In this context, perhaps the question to ask yourself is, “who is your Financial Quarterback™”?
Lineweaver Financial Group, 9035 Sweet Valley Drive, Valley View, OH 44125, 216-520-1711. Lineweaver.net. Securities offered through Triad Advisors. Member FINRA/SIPC. Advisory services offered through Lineweaver Wealth Advisors, LLC. Lineweaver Wealth Advisors is not affiliated with Triad Advisors.