Tag Archives: Prince

Are you making celebrity estate planning mistakes?

This article appeared in the September 17, 2016 edition of cnbc.com. It contains some important information you should review.

“Celebrities, they’re just like us. At least, they are when it comes to estate-planning mistakes.

You’d think that high-profile individuals with substantial and varied assets, often-complex family lives and a team of high-powered advisors at their disposal would have this locked down, more so than your average American. But that’s not so, attorney John Scroggin, a partner with Scroggin & Company in Roswell, Georgia, told advisors Thursday at the Financial Planning Association’s annual conference in Baltimore.

“Celebrities make the same mistakes,” he said. “It’s just that the nature of their celebrity exaggerates and balloons the impact of what the mistake was.”

Mistake #1: Not having a will

Nearly two-thirds of Americans don’t have a will, according to a July survey by Harris Poll for Rocket Lawyer, which queried 2,000 consumers. Famous individuals who have died without a will, include Abraham Lincoln, Prince, Sonny Bono, Jimi Hendrix and Pablo Picasso, according to Scroggin.

Not having a will can result in a number of potentially disastrous consequences, notably that assets may not be distributed in the manner in which you would have liked — or even intra-family battles. State intestacy laws will apply, and dictate who gets what share of the estate. (State law often cuts out stepkids, for example.)

Without specific instructions from the deceased, an estate may also be subject to drawn-out court battles as family members fight for what they perceive as their fair share.

“A lack of a will for any individual increases the conflict and increases the cost,” Scroggin said.

Mistake #2: Not having a current will

Signing a will is the beginning of the process, not the end, Scroggin said. Regularly update estate planning documents and beneficiaries as your financial and personal situation changes.

He points to the estate of singer Barry White, who was separated but not divorced from his second wife at the time of his death. His wife got everything, Scroggin said, while White’s live-in girlfriend of several years got nothing.

Mistake #3: Not planning for taxes

Even if your wealth falls under the federal estate tax threshold — in 2016, up to $5.45 million per person is exempt — it may be subject to state estate taxes, which often have lower caps.

Poor planning could force your heirs to sell valuable or sentimental items because they don’t have the liquid assets to pay those taxes, said Scroggin. He used the example of Joe Robbie’s family, which sold its stake in the Miami Dolphins and Joe Robbie Stadium to pay estate taxes.
Mistake #4: Not mentioning for personal property

Robin Williams’s family has engaged in a legal battle over the late actor’s film memorabilia, Scroggin said, while Martin Luther King Jr.’s children fought over his Bible and Nobel medal.

Individuals often fail to account for personal property in their estate planning, which can generate plenty of fights (legal and otherwise) over the future of family heirlooms, collectibles and other items of sentimental value.

Even when such items are mentioned, Scroggin said, it can be difficult for heirs to prove provenance if another party disputes the claim — that this is mom’s vase, for example, and not a newer one the deceased gifted to his second wife.

Scroggin also had some advice on this point for clients untangling the estate of someone recently deceased: “Change the friggin’ locks.”

It’s not unusual for family, friends and neighbors to help themselves to items they say the deceased told them they could have, he said.”

For more information about estate planning and how to get your affairs in order, check out our website www.diesmart.com.

50% of Prince’s estate value goes to pay estate taxes

Yesterday, Prince’s estate had to file an estate tax payment plan. Since his estate was valued at about $200 million, the taxes are expected to be about half of that – 40% to the federal government and 16% to the state of Minnesota. Allowable deductions and exclusions will reduce that amount to 50%.

If Prince had an estate plan with trusts to benefit relatives and charities he chose, the amount of taxes due would have been very low. Instead, only about 50% will go to his six siblings and the government will take the rest.

Prince’s estate didn’t have to actually have to pay the entire $100 million yesterday; it can make payments over time. That’s a good thing since Prince’s estate isn’t very liquid. There are many entertainment assets which are still being valued and it can take a long time since their actual worth will be determined.

It’s not clear whether the IRS and Prince’s estate will agree on the value of his music catalog; it’s difficult to put a dollar value on this kind of asset. The estate can learn from the experience of Michael Jackson’s estate. He died in 2009 and yet his estate is still not settled. The tax case will go on trial in Los Angeles next month where there will be a dispute about more than $700 million in taxes, interest and penalties.

You probably aren’t worth this kind of money but even if your estate is only worth a few hundred thousand dollars, you should still have an estate plan. It will make it much easier for your heirs and will enable them, rather than the government, to share in the total value of your estate.

For more information about estate planning, go to our website http://www.diesmart.com.

Do celebrities make money after they die?

In one word “yes”. Following is the article recently released by Forbes that lists the highest paid celebrities who died this year.

While the Pearly Gates seemed to welcome an unusual amount of celebrities in the past year (David Bowie, Prince and Arnold Palmer, to name just three), the long-departed King of Pop had the time of his afterlife.

The March sale of Michael Jackson’s half of the Sony/ATV music publishing catalog, famous for its library of Beatles tunes, for $750 million puts him at the top of our annual ranking of the top-earning dead celebrities, an ironic finish given that many critics and even advisors once derided the catalog as a badly overpriced investment. Jackson’s total pretax payday of $825 million ranks as the biggest annual haul by any celeb dead or alive.

“He was always doing stuff that was the best, the greatest, the biggest,” says Jeff Jampol, who manages the estates of Janis Joplin, Jim Morrison and others. “That was a big fight when he wanted to buy that catalog … it turned out to be one of the greatest investments ever.”

In 1985, Jackson paid $47.5 million ($140 million in 2016 dollars) to buy the Beatles-packed ATV publishing catalog. Ten years later, Sony paid him $115 million to form a 50/50 joint venture, then purchased his remaining half in March. In all, the sales (and accompanying distributions) gave Jackson’s estate, which is overseen by lawyer John Branca and music exec John McClain, a 30% annualized return on investment.

Peanuts creator Charles Schulz claims the second spot with $48 million. The cartoonist died of colon cancer 16 years ago, but lives on through the franchise—and its licensing revenue, boosted by last year’s well-received 3-D Peanuts movie. Golf legend Arnold Palmer rounds out the top three with earnings of $40 million, most of which was accumulated in the mortal realm, as he passed away just days before our cutoff.

Our set of 13 Halloween-spooky estimates are for pretax income from October 1, 2015, through October 1, 2016, before deducting expenses for agents, managers and lawyers. Sources include Nielsen SoundScan, Nielsen BookScan, PollstarPro, IMDB and interviews with estate experts.

Michael Jackson: The King Of Pop–and celeb earnings–dead or alive (Photo: Mike Powell /Allsport).

Recently deceased superstars Prince and David Bowie also rank high on the list. The Purple One passed away while still at the top of his touring game (grossing nearly $2 million per show) and sold more than 2.5 million albums over the past year, more than any other dead musician. Bowie, meanwhile, released his final album, Blackstar, just two days before his death; the ensuing sales spike helped him outsell Jackson and Elvis Presley (No. 4, $27 million) in the last year.

Presley’s total represents a 50% drop from last year’s figure (a change in how we accounted for Graceland ticket sales, not plummeting demand, accounts for the change). The King of Rock n’ Roll still moved more than 1 million albums on the year—most of them physical, not digital—remarkable for someone who’s been gone for nearly 40 years.

As for Jackson, the Sony/ATV payday gives him the last laugh over doubters. But a decade ago, he already knew what a good deal he’d made, as detailed in my book Michael Jackson, Inc. On a 2007 conference call, the King of Pop reminded Sony/ATV chief Marty Bandier of the acumen that had earned him a nine-figure return on paper by that point.

“See,” he told Bandier. “I told you I knew the music publishing business.”

13. Elizabeth Taylor ($8 million)
12. Steve McQueen ($9 million)
11. David Bowie ($10.5 million)
10. Bettie Page ($11 million)
9. Albert Einstein ($11.5 million)
8. John Lennon ($12 million)
7. Theodor “Dr. Seuss” Geisel ($20 million)
6. Bob Marley ($21 million)
5. Prince ($25 million)
4. Elvis Presley ($27 million)
3. Arnold Palmer ($40 million)
2. Charles Schulz ($48 million)
1. Michael Jackson ($825 million)

You may not be a celebrity and you may not have an estate worth millions of dollars but you still need to do some planning for what you want to have happen to the assets you do have. For more information about this topic, check our our website www.diesmart.com.

Prince’s Urn – Totally Unique

This past week, People Magazine revealed the first photos of Prince’s urn, one that is a totally unique as the man was himself.

While alive, Paisley Park in Minnesota was Prince’s home; as of last Thursday, it became a museum and memorial to him. At that museum, his ashes are on display in a one of a kind urn that was designed by his sister, Tyka Nelson and his nephew President Nelson. They partnered with Foreverence, a company that developed a scale model of Paisley Park itself. It’s 14 x 18 inches and decorated with Prince’s famous symbol in his signature purple.

His ashes are sealed in the front column and, though it can’t be seen by the public, the facade “opens to reveal a miniature replica of Paisley Park’s grand atrium, including the singer’s signature purple Yamaha piano, white ornamental doves and decorative tile floor. The interior even includes real working lights.”

According to its website, Foreverence designs urns and memorials that “celebrate life, passion, and legacy”. They’re “a timeless tribute as unique as the life it represents.” They certainly managed that for Prince.

You may not want such a unique resting place but you may want information about options that are available to you. To find out more, go to www.diesmart.com.

From 29 to 6 – at what cost?

As everyone probably knows by now, Prince died on April 21, 2016 and he didn’t have a will. You’d think that someone who had attorneys involved in almost every phase of his life and was worth more than $250 million would have done some estate planning, but evidently not.

Once his death was announced, 29 people came forward claiming to be Prince’s relatives. After several court hearings and DNA testing, the group was whittled down to 6. A few weeks ago, the judge ordered additional genetic testing to conclusively determine whether these people are his descendants.

What did all of these court hearings, testing sessions and attorneys cost? We don’t know but the amount is definitely a sizeable figure. It’s an amount that could have been avoided if Prince had written a will and a trust. In those documents, he could have spelled out exactly what he wanted done with his money and to whom he wanted it to go.

You probably don’t have $250 million to worry about but, whatever the amount, you can make it much more cost effective and a lot less nerve wracking for your heirs if you’ll just prepare the appropriate legal papers. That way, there won’t be a lot of guessing and fighting in court about what others think you meant to happen. It will all be spelled out in your will and trust so there will be no doubt about your wishes.

For information about estate planning, go to our website www.diesmart.com or consult a estate planning attorney.