Prince Died Without a Will, leaving a Mess!

Recent Superstar Death Brings Estate Planning to the Forefront of Discussion

The untimely death of superstar Prince has brought a surprising issue to American living rooms: estate planning. If current reports are correct that Prince died without a will, state law and the Court system will dictate who controls and inherits his sizeable estate. It is also likely that taxing entities will take a bigger bite out of his estate – costing his family millions, unnecessarily —  before anyone inherits anything.  All of this could have been avoided and there’s an important lesson here for you and your family.

Prince died on Thursday, April 21, at the age of 57, in Carver County, Minnesota. He had one half-sister, Tyka Nelson. He also had six half-siblings. Prince was predeceased by both of his parents and two of his half-siblings. He was divorced twice and had no living children.

Ms. Nelson recently filed documents with the Carver County probate court, asserting that she believed that her brother died without a will. She also asked that the court appoint a special administrator to handle Prince’s affairs until a personal administrator was appointed. A judge appointed a banking affiliate to serve in this role temporarily.

When a person passes away without a will, they are said to have died “intestate.” When this happens, state law directs the distribution of the person’s property, known as the “estate” through a process called probate. And, it’s up to the Court to decide who controls the estate.

If Prince indeed died without a will, these statutes will result in his siblings dividing his estate, including his half-siblings. This may or may not be what Prince would have wanted, had he made provisions himself.  And, his estate is likely to be overseen by a paid executor, instead of a family member or friend he would have chosen.

So, what does this mean for you?

Just like Prince, if you do not plan for your death, your family will get stuck in Court and could end up in conflict as well.  It’s an unnecessary expense to your family, causes additional heartache and grief, and is totally avoidable.

Let Prince’s death be an inspiration to you to leave your loved ones with a legacy of love, not a big mess to clean up. We can help.

Nalini S Mahadevan, Esq

P: 314.932.7111  nsm@mlolaw.us   www.mlolaw.us

Disclaimer: Please do not rely on this blog for legal advice.  Call me if you want to get advice and sign an engagement letter with my law firm.

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Do Physicians Really Need Asset Planning?

A couple consulted me about writing a will and trust for their family. The husband is a doctor and the wife is a lawyer, both in private practice. They had two young children under the age of 18 and no prior marriages. Both carried malpractice insurance for their professions and an umbrella policy. They had good cars and a residence in a nice neighborhood. They also had retirement plans and mutual funds and children in private school. They were saving for college through 529 Plans.

They wanted to protect their families and assets from lawsuits and creditors. Missouri is a great asset planning state, but the planning to protect assets should start at least four years in advance—creditors can sue to set aside the transfer. Assets can be attached if the transfer (to another person or entity or trust) occurs and the lawsuit is filed within four years of the transfer.

The best way to protect assets is to transfer the asset to a trust, other entity, or person with no recourse to the owner. However, a house jointly owned by husband and wife is not protected in the event of a divorce the property, and can be divided between the parties. The creditors of the deceased spouse can also sue to recover from the sale of the residence. Hence holding assets in joint name may not always be the answer.

The 529 plans are not subject to federal income tax and can be paid in advance up to five years depending on the plan—and are excluded from the estate of the deceased—to offer asset protection. Professional and umbrella polices may be insufficient to satisfy creditors in a lawsuit, which means that protecting other assets becomes imperative.

See you in my next blog.

Nalini S Mahadevan, JD, MBA
Immigration Attorney St. Louis, Missouri
nsm@mlolaw.us

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The information is not meant to create a client-attorney relationship. This blog is for informational purposes only, and is not a substitute for legal advice. Situations may differ based on the facts.

Copyright 2014. All rights reserved.

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