The death of music icon Prince on April 21, 2016, presents an example for estates of all sizes of the privacy an estate plan can provide. Last week, Prince’s sister, Tyka Nelson, filed a petition with the Carver County, Minnesota probate court stating Prince did not have estate planning documents to direct the management and disposition of his estate. As a result, the administration of his estate will be a matter of public record, easily accessed by the media. Reporters will be able to find a list of all of Prince’s assets, the values of such, the names of beneficiaries inheriting, as well as exactly how much and which assets they will receive. This is an unfortunate posthumous development, considering just how private the artist appeared to be in life.
The only action in the court proceedings so far has been the appointment of Bremer Trust Company to temporarily oversee Prince’s estate for six months. While this is a prudent step to insure that any immediate business decisions relating to Prince’s assets can be properly and professionally addressed, it remains to be seen whether this Court will be the primary vehicle for the administration of Prince’s estate.
Tyka Nelson’s representation that Prince did not have any estate planning in place may not be accurate. Prince was a shrewd businessman who carefully controlled every aspect of his music and career. It is quite possible that Prince completed some level of estate planning and his assets are held in trust to be managed and distributed in accordance with the terms he set forth. If such a trust exists, it would be administered outside of the public forum of the court and not be subject to review by anyone other than those with a direct interest. Prince would have named very trusted advisors to serve as the trustees of such a trust, and those trustees, if they exist, would not breach their fiduciary duty to the trust and the beneficiaries by publically commenting on the existence of the trust.
The lesson for the rest of us is that privacy in an estate plan is important and easily attainable, regardless of the size of the estate. Without an estate plan, anyone can discover the details of the distribution of your assets at the time of your death—including ex-spouses, creditors, and the media. Judgment purchase companies are known to review the public court fillings to contact beneficiaries to offer a lower, immediate payout in exchange for signing over the estate inheritance, which grieving beneficiaries may find very invasive. By creating a trust for the management and distribution of an estate, the terms of the distribution of any and all assets remain private and administration of the trust is not required to take place in the public forum of a probate court. If privacy for your heirs is important to you, take the time now to ensure your estate has the proper protections in place.