It’s hard to believe that pop icon Prince passed away two years ago. Since his passing, his estate has been thrust to the forefront. One reason is because it is extremely valuable, estimated at $200 million. Another reason it has received so much attention is because Prince died without any sort of estate plan. There was no will, no trusts, no direction whatsoever as to how the estate’s assets should be distributed.
This has created a lot of friction within the family, which likely has only been exacerbated by the probate process. Because Prince’s estate was not subjected to a will, the matter must pass through probate to determine how the estate’s assets should be distributed. Making matters more difficult in this case is the fact that the estate’s executor and the federal government must first come to a consensus with regard to the estate’s value before it can be divided amongst Prince’s heirs. This has drawn the process out, costing the estate millions of dollars in management and legal fees while the family has yet to receive anything.
Prince’s case should serve as a warning to all. Failing to create a sound estate plan can result in headaches and a greatly diminished estate. Even having just a will can simplify matters. Although an estate subjected to a will still has to go through probate, the process is much quicker, as the court essentially just wants to confirm that the will is valid. Once that determination is made, the estate is distributed in accordance with the will.
However, many people choose to utilize trusts in order to avoid probate altogether. These legal tools allow an individual to protect an estate’s value, ensure that named beneficiaries benefit from a trust’s assets and allow an individual to set the terms by which those trust assets are distributed. In short, trusts give an individual a considerable amount of control over his or her estate without the costs, time and hardship often associated with probate. Therefore, those engaging in estate planning should carefully consider which types of legal vehicles will work for them.