Another celebrity may have died without a will

According to early reports, music superstar Prince died without a will. Just days after his funeral, his sister Tyka Nelson petitioned the probate court to appoint a special administrator for the estate, stating that she believed that there was no will or other testamentary document. If there is, in fact, no will, the heirs will be Prince’s siblings and half-siblings in equal shares.

Local newspapers reported that some $31 million in Minnesota real estate was owned by Prince or business entities that he controlled. The larger estate asset is likely to be his body of work, for which he owned the copyrights. Early estimates of their value have ranged from $100 million to $300 million.

How could someone with an estate so vast not have a will? Oddly enough, most people procrastinate on planning their estates. We don’t know the full story yet. Prince was a very private person in life. Perhaps he employed trusts so as to preserve financial privacy after his death? If so, his sister might very well not be aware of it. It is known that there was friction among the siblings when Prince was in charge of settling his father’s estate in 2001.

Here’s an interesting footnote. Ms. Nelson asked the court to appoint Bremer Trust in St. Cloud, Minnesota, as the special administrator. She stated that they already were familiar with Prince’s financial affairs. They have been given that assignment for a preliminary six-month term.

The trickiest part of estate planning for the celebrity estate concerns the right to publicity. In some cases, as with Elvis Presley or Michael Jackson, this may prove to be the estate’s most valuable asset. Yet the value of that asset on the date of death is highly uncertain, almost unknowable.

When he died, Michael Jackson’s career was at a low point, so low that his executors valued his right to publicity at a few thousand dollars. The IRS disagreed, believing it was worth hundreds of millions. That difference has triggered litigation that is expected to go to the Tax Court next year.

Having a will won’t resolve serious issues such as these, nor is it likely to have a material effect on death tax obligations. But having a will does make life somewhat easier for the survivors. It will guide the disposition of one’s property, as well as nominate a person or firm to oversee the process of estate settlement.

If you don’t yet have a will, or if you haven’t reviewed your will since the last major tax reforms in 2012, you should make an early appointment with our estate planning advisors.

(May 2016)

© 2016 M.A. Co. All rights reserved.

 

Penciled changes to a photocopy of a will, including “void,” does not revoke it.

In re Estate of Sullivan, 868 N.W.2d 750 (Minn. Ct. App. 2015)

Esther Sullivan executed her will in January 2006. The will was properly notarized and had the required two witnesses. Esther divided her estate between her grandson, Joseph, a former employee, Tara Jean. The nature of the employment was not disclosed by the court, but Tara Jean was named as personal representative of the estate. She would be responsible for collecting the estate’s assets, filing the tax and probate forms, and distributing the assets.

By 2008 Esther had a change of heart. On a photocopy of the original will, she wrote across the top “[t]he Will dated January 19, 2006 is void and to be replace[d] with this and all written in changes.” A variety of alterations were penciled in, the most consequential of which was naming Joseph the personal representative instead of Tara Jean.

Not yet completely satisfied with her handiwork, in October 2010 Esther downloaded a will form and completed it by hand. This time, in addition to naming Joseph as personal representative, she made him the sole heir of all of her property, “after her debts are payed (sic).” Interestingly, Tara Jean witnessed Esther’s signature on the 2010 will.

After Esther died, Tara Jean offered the 2006 will for probate. Joseph objected, and he submitted the 2008 and 2010 alternatives as being more consistent with Esther’s final intentions for her property.

Both the lower court and then the appellate court held that the statutes governing wills must be strictly adhered to. The same formalities that apply to creating a will apply equally to its revocation. Neither the 2008 nor the 2010 will was executed with sufficient witnesses to Ester’s signature, so they failed the test. Alternatively, the appellate court held, a will may be revoked by a “revocatory act on the will,” including “burning, tearing, canceling, obliterating, or destroying the will or any part of it․” Such an act must be done to the original will, not to a photocopy of it.

Without the required witnesses, the 2008 and 2010 documents amounted to nothing more than notes for making a future will.

During the appeal, Joseph argued that Tara Jean had breached her fiduciary duty to the estate by offering the 2006 will for probate when she herself was a witness to the 2010 attempted revocation. Unfortunately, the Court held, he brought that argument up too late to be considered.

(April 2016)
© 2016 M.A. Co. All rights reserved.