Apparently, he did not believe he was going to die anytime soon. As a result, he left no Will, which means he did no estate planning, despite having an estate worth $300M+ and potentially upwards of $500M considering future income from his works and holdings. What does this mean? First, it means his property will pass to his heirs in accordance with the intestacy laws of the state of Minnesota (to his sister and half-siblings). Second, it means over half of his estate will be consumed by estate(transfer) taxes.
With a $5,450,000 federal estate tax exemption, Prince will have a $294,550,000.00 taxable estate will be subject to the 40% estate tax rate (this is approximate, not exact because the estate will have deductions, etc.). In addition, being a Minnesota resident, his estate is also subject to Minnesota “death taxes” and the Minnesota exemption amount is only $1.6M with Minnesota’s top death tax rate at 16%. When added together (40%+16%), over half of Prince’s estate will be taken by the federal and state governments. Prince could have avoided a lot of this tax, if he had estate planned.
A good estate plan, regardless of the size of your estate, is essential. Do not let this happen to you. If you have questions about an estate or how it is being handled, please call us immediately at (214) 965-9999. We look forward to talking with you about your situation.