Question

Rock star, Prince, passed away in early 2016. Investigate public information available on the internet and make a posting regarding the effectiveness of his estate planning.

Does it appear that his estate was properly protected for his heirs? Why or why not?

Answer 1

Prince died without establishing an estate plan. He has left behind an estate of $200 million and since no estate plan was established the estate will have to pay around $100 million in taxes. This will erode almost half of Prince’s total tax.

Of the total estate of $200 million, half would go as taxes and hence the remaining half of $100 million will be divided between Prince’s six siblings.

It is clear that Prince’s estate was not at all protected for his heirs as no estate plan with trusts was put in place. Setting up an estate plan with trusts would have ensured that his assets were protected for not only his heirs but also for his selected charities.

In order to protect one’s assets for heirs one should create a will, set up trust accounts in the name of beneficiaries, and name an executor of the estate. None of this was done by Prince.