How could Prince die without a will? He didn't amass a $250 million estate just through exceptional musical talent. He was also a shrewd businessman. Two years ago, Prince took control of his musical catalog and related copyrights, and negotiated a new contract with Warner Bros. His estate will reap at least $100 million on royalties alone over the next few years.
Prince was extremely hands-on with the business side of music. He shunned attorneys, preferring to deal directly with record studios and concert promoters, and made a point of controlling his legacy. It was part of his persona. Prince fought to remove his songs from YouTube and cut deals directly with digital music providers.
Yet he neglected to decide what would happen to his estate after death, leaving behind unanswered questions instead of a plan. Who will control his "vault" of unrecorded music? Where will his fortune go? Prince died unmarried and without living parents, and his only child died shortly after birth. Surviving family members include a sister and five half-siblings. Observers expect a will contest, and additional claims against the estate are likely. One thing is certain: Attorneys will benefit lavishly, as will the federal government and the state of Minnesota. His heirs -- whoever they are -- will pay a hefty estate tax that could have been minimized with a sensible estate plan that included charitable giving.
Amazingly, it is not unusual for the rich and famous to die without a will. Jimi Hendrix, Pablo Picasso, Bob Marley, Howard Hughes, Sonny Bono and Abraham Lincoln all died without a will. Lincoln was the first president to die without a will even though he was an attorney. Some sources estimate that more than 55 percent of adult Americans do not have a will or estate plan. Only 41 percent of baby boomers (ages 55 to 64) have a will. Only 32 percent of African-Americans have one, and only 26 percent of Latinos.
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Procrastination goes a ways toward explaining why so many of us fail to invest the time to create an estate plan -- tomorrow's always a better day to confront one's mortality. On a more earthly level, it's uncomfortable to decide who will be in charge or who will benefit upon one's death. As an estate planning attorney, I often hear clients express fear of giving offense. "If I pick my son Johnny to be in charge of my business, won't Beth be angry?"
Some also cite cost as a barrier. But estate plans aren't expensive, particularly compared with the trouble they ward off.
In California, a perfectly acceptable will is one that's drafted completely in your handwriting with your signature at the bottom. You don't even need a notary. Or you can hire an attorney, who'll probably cost less than you imagine and can help you sort out any thorny family issues, like planning for a disabled child or parent. An attorney can also minimize tax consequences and maximize the money your heirs get.
If you die without an estate plan, on the other hand, your loved ones could well end up in probate court. The American Bar Association estimates that probate proceedings cost Americans up to $2 billion per year, of which nearly $1.5 billion is paid in attorneys' fees.
Estate plans are not just designed for death; when done right, they also provide for delegating authority to someone to make medical or financial decisions should we become incapacitated. If Prince did not even have a simple will, it's unlikely he bothered to execute an advanced health care directive -- a serious oversight given that he was a devout and active Jehovah's Witness with clear beliefs about blood transfusions and other medical procedures.
In this one area, don't be like Prince -- or Pablo Picasso or Abraham Lincoln. If you do not have a will or estate plan, get busy. Plan for taxes. Decide who will be in charge. Decide who gets what. Decide not to let the government, or attorneys, get your inheritance.
Jack B. Osborn is an estate planning attorney and partner at the law firm of Brown White & Osborn LLP in Redlands, Calif. He wrote this for the Los Angeles Times.