Even iconic artists like Prince can encounter estate planning challenges. As a devoted fan of many musical legends, I was surprised as an Olney trust lawyer to learn that Prince passed away without a trust or will. Sadly, the resulting legal battles within his estate continue to make headlines. Let’s delve into the situation and discover valuable lessons we can all learn from this unfortunate estate planning situation.
The Prelude: A Musical Legacy Unprepared
Prince, the musical genius behind hits like “Purple Rain” and “When Doves Cry,” left behind a substantial estate valued at hundreds of millions of dollars. Unfortunately, his passing in 2016 without a will meant his estate entered probate, a legal process for distributing assets without a clear plan in place.
Eventually, six of Prince’s siblings inherited his estate, which was divided between two limited liability companies (LLCs). These LLCs formed a joint venture to manage Prince’s assets, with two former business advisors appointed as managing members. The siblings agreed to be passive members, uninvolved in day-to-day management decisions.
The Unfortunate Turn: Disagreements and Legal Battles
Despite the initial agreement, one of Prince’s sisters, Sharon, sought to exert more control over the estate. She attempted to replace staff at Prince’s former residence (now a museum) and advocated for extravagant events, but her requests were denied by the managing members.
Sharon then tried to replace the managing members and, failing that, led a successful effort to amend the LLC agreement. However, the managers filed a lawsuit, arguing that the amendment was invalid.
The Lesson: U Got the Look (of Someone Who Needs an Estate Plan)
The court ultimately sided with the managers. Why? Because in Delaware (where the LLC was formed), contracts are king. Even if you have a majority vote, you can’t just change an agreement willy-nilly if it goes against what everyone originally agreed to. This highlights several crucial lessons we can all learn:
- Create an Estate Plan: If Prince had a trust or will, much of this legal turmoil could likely have been avoided.
- Understand Agreements: Thoroughly review and comprehend any **contracts** or agreements before signing them.
- Respect Roles: If you agree to be a passive member in a business arrangement, adhere to that role.
- Put It in Writing: Clear, well-drafted agreements are essential for preventing future disputes.
- Seek Professional Guidance: Estate planning and business agreements are complex areas of law. Consult with experienced professionals for expert advice.
The Encore: Let’s Go Crazy (for Good Estate Planning)
As Prince himself sang, “Life is just a party, and parties weren’t meant to last.” While our time on Earth is finite, a well-crafted estate plan ensures that your legacy endures harmoniously.
Don’t delay in securing your own estate plan. Schedule a consultation with us today to create a plan that protects your wishes and safeguards your loved ones. Let’s create a legacy that would make any music icon proud. Contact us at (240) 813-8843 or click here and we’ll help you get started.