History has a way of repeating itself. The passing of Minnesota music icon Prince may serve to provide the latest legal battleground. That’s because the rock star died last month without a will. Many may be aware that legal wrangling continues today over the estate of Michael Jackson. He died in 2009.
Today, a judge in Carver County appointed a Bremer Bank affiliated trust as temporary special administrator over the Prince estate. The road ahead, as a number of legal experts observe, is bound to be a rocky one. Besides having to assess the current and future value of various elements of the estate, there are members of the deceased’s extended family who may stake inheritance claims.
And if Minnesota and federal tax agents feel valuations have come in too low, the possibility of a long, drawn out and complicated fight over taxes is high.
It might seem to many readers that this is an issue that only the very wealthy have to deal with. But that really isn’t true. According to one recent poll conducted by an online legal advice website, 64 percent of all Americans don’t have wills.
It may surprise you to know that if no Prince will turns up about estate could go to taxes. The Internal Revenue Service assesses estates of any value over $1 million at 40 percent. Minnesota estate taxes run between 10 and 16 percent.
Right now, the estate is said to be worth up to $500 million. But it’s unclear if that includes the value of recordings that have yet to be published or what revenue could be generated in the years to come.
The point is, anyone can face a situation like this. Many don’t have wills or estate plans and that means their assets become tax targets. When these kinds of issues do arise, having the help of an experienced tax attorney could be crucial in minimizing obligations.