What happened to the late singer Prince’s estate?

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t was soon established following his death that Prince had failed to prepare a will, causing a legal battle that remains unresolved five years on.

During his lifetime, Prince was married and divorced twice, and is not known to have any surviving children. His only relatives are his sister and five half-siblings.

Within two weeks of his death, approximately 700 people all claiming to have some relation to the late singer came forward and attempted to put in a claim against his estate.

As expected, the majority of these claims were spurious and no evidence could be provided to support them; however, the estate began to incur costs for the time spent dealing with each of these claims. It is now estimated that the legal costs incurred as a result of this are over $50m, and are likely to increase further.

Prince owned many unique assets, several of which are copyrights or other intellectual property, and it is likely he knew who he wanted to participate in managing the assets after his death, but that information isn’t available.

This demonstrates the importance of having a professionally drafted will clearly setting out who the executor and beneficiaries of the estate are.

Failure to do so can result in increased costs, conflict between family members and can result in someone benefitting from your estate who you would not have chosen.

The choice of executor determines much of what happens and even in much less valuable and complicated estates, that decision is critical.

The role of executor is to deal with your assets, pay any debts owed by you, and ensure that everything that is left passes to the correct people in accordance with your wishes.

It is therefore important to appoint an executor that you can rely on to handle your affairs responsibly. Often, what the deceased would have wanted differs greatly from what happens because either the will is inadequate or worse, no will exists.

We often hear about intergenerational wealth planning and the importance of effectively passing wealth down through the generations but how often do we ensure that all family members are aware of these plans? Sue Wakefield of ZEDRA writes

Making the decision to engage professional help is a step in the right direction towards effective wealth planning and ensures that all factors are discussed and considered.

Families of today come in all shapes and sizes, and modern families are often larger and very different to those 40 or 50 years ago. This makes planning ahead and discussing strategies with everyone even more important.

You may feel uncomfortable talking about money with your family; however this is where the right professional adviser can support you by facilitating family meetings and discussions.

Triggers for discussing family wealth planning
There is no magic formula for involving next generation in wealth transfer conversations and every family is different; involving children or grandchildren in their mid to late twenties is often a time when they want to be trusted and involved in the family finances. But any conversation at whatever age is better than no conversation at all.

As a parent or grandparent, there are usually some key milestones which might be a good time to consider and discuss your plans and address your growing family’s needs. These include:

• The birth of a child or grandchild;
• Starting schol or higher education arrangements – perhaps facilitating a private school education;
• Early adulthod firsts such as a first home, vehicle or offering career development support;
• Marriage and prtecting wealth in cases where relationships might not last;
• Retirement planning to protect you while also allowing family members to access family wealth;
• Later life arrangements t protect your affairs should you lose capability, but also ensure your wishes and later life care preferences are followed.
• Discussions involving children and even grandchildren serve so many purposes; they prepare the next generation, they help manage expectations, and they give your loved ones the opportunity to think about their own wealth planning. Talking openly also prevents any nasty surprises further down the line and provides much needed education about wealth and finance to the younger generations.

How can you start a conversation around succession planning?
You can start by thinking about what your aims are for your wealth – establish what’s important to you and how you want your wealth to impact your family.

You can then create a long-term plan for your family, and involve them in the conversation at this stage. Involving a professional adviser can provide a deeper understanding of all the options available and put those plans into action.

You then need to continuously review the actions you have taken to ensure you are making the most of any new allowances or options available, and your actions are aligned with your changing family structure.

The great wealth transfer
We are currently in a period that many experts are calling the biggest wealth transfer period in history due in part to large increases in house prices and the stock market over the last few decades.

Ensuring this transfer happens effectively, harmoniously and that wealth is optimised is in no small part due to family’s communicating their plans with each other and involving their loved ones in discussions with their advisers.