Half of Prince's Estate Is Going to the Tax Man

Illustration for article titled Half of Prince's Estate Is Going to the Tax Man

On Tuesday, Prince’s sister Tyka Nelson filed a bunch of papers at the Minnesota probate court that indicated Prince died without executing a will. This is having expensive consequences.

Forbes estimates that Prince’s estate is probably worth almost $300 million. In addition to his actual property, there is his intellectual property, including what reportedly amounts to a vault of unreleased songs. How do you decide what something so priceless is worth, and who it rightfully belongs to?

Even if you could, the biggest problem is that without any estate planning or directives in place, everything now falls under the jurisdiction of Minnesota, who will appoint a special administrator to value everything and decide who will receive what assets. Then come the taxes. Forbes spoke with expert Martin Neumann, who summed up the“cha-ching” noises coming from the statehouse:

“The IRS is going to be a partner with the estate for a long time to come to the tune of 40 cents on the dollar,” explains Martin Neumann, a partner at Weinstock Manion with expertise in probate and estate planning. With a maximum federal tax bill of 40% and a maximum state tax of 16%, the taxes temper out to a 50% tax bill. For an estate worth a reported $300 million by current estimates, it could be paying up to $150 million in taxes. “So part of what will be handled is an agreement with the taxing authority with how the estate taxes are paid and over what period of time,” Neumann explains.

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Another problem facing Prince’s heirs is that Minnesota has a common law, but not a statutory right of publicity. There’s been no court case in the state establishing whether or not his work will go to them via descendibility, so they could hypothetically make money with post-mortem licensing deals in future. Prince would probably hate those sorts of deals anyway, but this still doesn’t seem like a situation he planned.

Image via Getty.


Contact the author at aimee.lutkin@jezebel.com.

Contributing Writer, writing my first book for the Dial Press called The Lonely Hunter, follow me on Twitter @alutkin

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DISCUSSION

This, of all things, strikes me as not being a horrible outcome. At least his taxes will go to benefit (well, some portion of them, hopefully) the area where he grew up and spent his entire adult life and was by most estimates a very involved community member.

What seems far more concerning to me is the way his intellectual property, especially the songs we all know and love, ends up being used. It’s not as if Prince eschewed marketing deals, but I’m cringing picturing all the terrible commercials we’re probably going to end up seeing his commercials in. Having the state involved doesn’t help that, but really, having eight (? in addition to Tyka, I’m seeing reports that his mother has two other children and his father has five others) siblings who all have claims without someone appointed to make decisions about the music is messy enough already. There’s basically no way that many people will all agree about everything, even if they are close, which it sounds like not all of them are.