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Behind closed doors, lawyers dig into Prince's estate

2016-05-08 19:51
 

Minneapolis - Prince left behind no known will when he died April 21, and the work of settling his multimillion-dollar estate is being carried out behind closed doors by tight-lipped lawyers.

Estate attorneys unconnected to the case say they have a pretty good idea what's happening, starting with a careful accounting of the megastar's assets, debts and whether any unknown heirs exist.

Some questions and answers about untangling the estate of an artist who industry experts say will continue earning millions after his death:

WHAT'S HAPPENING?

In the days since Bremer Trust was named special administrator of the estate, the company likely has been tallying up the assets Prince left behind - financial accounts, real estate, recording catalogue and the unreleased recordings in his vault at Paisley Park. It will also tackle the complicated job of trying to put a value on them.

The company has been working to verify who Prince's heirs are and determine what creditors are owed. And it's still trying to dig up any will, trust documents or estate plan.

WHO ARE THE HEIRS?

Assuming there is no will or trust - and several experts say it's too early to be sure there isn't - Minnesota law is clear on who inherits Prince's estate: his sister Tyka Nelson and his half-siblings. That is, unless it turns out he has an unknown child.

Nelson's initial filing identified five surviving half-siblings, but another person, Illinois resident Darcell Gresham Johnston, is claiming to be a half-sister.

Court papers identify Johnston only as "an interested party and beneficiary in this matter". When asked by The Associated Press whether she's a half-sister of Prince, she replied, "Yes, but no comment." She wouldn't say who her parents were.

The judge authorised genetic testing on Friday on a Prince blood sample kept by the medical examiner "recognising that parentage issues might arise".

DON'T RICH PEOPLE NORMALLY HAVE WILLS?

Lawyers with wealthy clients strongly recommend wills, or trusts, which many prefer because a trust doesn't have to go through probate and can remain secret. That's usually appealing to someone as private as Prince.

Los Angeles entertainment lawyer Howard King, who represented Prince from 2011 to 2013, wouldn't say whether he discussed having a proper estate plan with Prince, but said his death has generated a lot of new trust and estate business in the entertainment community.

"Every one of our artists has very strong ideas about how their intellectual property should be handled, so we do make sure to advise all clients to make sure that if they care about how their property is handled after they pass, they need an estate plan," King said. "And some clients take our advice and some don't."

WHAT'S NEXT?

No hearings are scheduled. Within the next six months, someone is likely to petition the court to appoint a personal representative, who would have authority to make the big decisions. And that could be the beginning of a big fight.

That petition could come from Nelson, who got Bremer Trust named special administrator. She might ask to be named executor, or another sibling could seek that job. Experts say there's a good chance the court will pick Bremer Trust or another neutral party.

The court will also have to rule on the company's motion to dismiss as frivolous a claim filed by a California man who contends Prince gave him control over his music catalogue and vault via a verbal agreement in the mid-1990s.

With so much money at stake, it's a good bet that more claims will come for the court to sort out. The judge has set a four-month deadline for creditors.

WHAT ABOUT THE TAXMAN?

Taxes could gobble up over half of Prince's estate. Come January, whoever is in charge of the estate is supposed to file estate tax returns with the Internal Revenue Service, assuming it's worth more than about $5m, and with the state, assuming it's bigger than $1.6m.

Those tax filings won't be public, but the bills could be substantial since the top federal rate is 40% and Minnesota's is 16%.

Read more on:    prince  |  us  |  celebrities  |  music  |  celebrity deaths
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