Prince may not have had a will. That's not the only reason settling his estate could get very messy.

Why the Settling of Prince’s Estate Could Get Very, Very Messy

Why the Settling of Prince’s Estate Could Get Very, Very Messy

Moneybox
A blog about business and economics.
April 27 2016 4:23 PM

Why the Settling of Prince’s Estate Could Get Very, Very Messy  

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Prince didn’t leave a will, his sister says. Alas, that’s not rare at all. Above, Prince performs in Paris on Oct. 11, 2009.

Bertrand Guay/AFP/Getty Images

Who will inherit Prince’s fortune and take charge of his legacy—including the treasure trove of music the late pop icon is rumored to have recorded, but never released?

Helaine Olen Helaine Olen

Helaine Olen is a former columnist for Slate and co-author of The Index Card. She was the host of the Slate Academy series the United States of Debt.

That’s a good question.

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On Tuesday, Prince’s sister, Tyka Nelson, filed a request with a Minnesota court, claiming the renowned singer died without a will in place and asking that initial oversight of the estate go to a bank which, she said, her brother worked with during his lifetime. Forgive me for thinking this won’t solve the estate’s long-term problems, even if the motion is approved. If no will surfaces, this is very likely going to turn into one giant mess.

According to Minnesota law, if a person dies intestate (that’s lawyer-speak for without a will) and doesn’t have a surviving spouse, children, parents, or grandchildren, the next in line to inherit would be his or her siblings. And, no, Minnesota law makes no legal distinction between full and half brothers and sisters. 

Prince was divorced twice. His one child died shortly after birth. His parents are dead, too. This leaves not just his full sister, Nelson, but also seven half siblings as his equal inheritors.* But not all of those siblings are still alive, so their rights transfer to their children. None of their personal relationships with their late brother or uncle is considered relevant.

Moreover, as the Wall Street Journal reports, it’s likely other parties enjoy rights to the unreleased music. While Prince famously warred with his first recording company, Warner Bros., and left the label in the 1990s, his relationship with it will continue after his death. From the Journal, which interviewed Ken Abdo, an entertainment lawyer whose firm worked with Prince for several decades:

The matter of who controls rights to which recordings is one thing: Warner Music Group co-owns rights to unreleased music in Prince’s vault recorded between 1978 and 1996; any release requires permission from both Warner and the singer’s estate. But there is also the complicated task of sorting out matters related to any collaborators who wrote or recorded with Prince in the studio, Mr. Abdo said.
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Even further complicating the matters: It’s almost certain the Internal Revenue Service is going to take an interest in Prince’s wealth, as well. The IRS and the estate of Michael Jackson have battled for the better part of a decade. According to the Los Angeles Times, Jackson’s executors claimed it had a $7 million net worth when he died in 2009. The IRS begged to differ, claiming it was worth more than $1.1 billion. Among the matters under dispute: the value of Michael Jackson’s image itself. The estate claimed a little more than $2,000, citing its tarnishing following years of accusations of child sexual abuse. The IRS disagreed—by a mere $434 million.

There are lots of reasons for this sort of divergence, but one is almost certainly how, exactly, one should value the estate. How do you account for the fact that, in the cases of celebrities like Michael Jackson and Prince, their death in and of itself increases the worth of their work, which will continue to earn money for its owners? Do you stop the clock at the moment of death? Or do you factor that in somehow? After all, sales of Prince’s music soared in the aftermath of his death. As I type, four of the top five digital album downloads at Amazon are Prince recordings (Beyoncé’s Lemonade is No. 1), and Nielsen is reporting millions of combined album and song sales since his death on Thursday.

In fact, a majority of us lack wills—a survey conducted in 2014 by Rocket Lawyer, an online legal advice website, put the number at 64 percent. Even a substantial minority of people most of us would objectively consider wealthy fall into that category: Last year a CNBC poll discovered only 69 percent of respondents with assets between $1 million and $5 million had consulted with what they called a “financial expert” to put together an estate plan, meaning close to a third had not. A survey released by Lawyers.com and Harris Interactive from about a decade ago also found that while a bare majority of whites could claim a will, only 32 percent of blacks and 26 percent of Latino respondents said the same.

It’s certainly not unheard of for a celebrity to die without a will. Amy Winehouse didn’t have one. Neither did Sonny Bono. Moreover, wills and estate plans in and of themselves don’t prevent disputes from breaking out. Multiple trusts and a prenuptial agreement did not stop Robin Williams’ children from battling with their stepmother over the comedian’s personal possessions. The Simpsons’ late co-creator Sam Simon’s estate has been embroiled in fights over everything from the care of his dog to what is exactly due to people like his ex-wife and girlfriend.

But Prince was notorious for the control he exercised over his work—that’s likely why there are so many unreleased recordings. And now a committee of heirs with possibly competing wants, needs, and interests will sort through it? Good luck with that. 

*Correction, April 27, 2016: This post originally misstated that Prince had five half siblings. There are five surviving half siblings, and two deceased ones.