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Why the Government Will Get Over Half of Prince’s Estate

Who doesn’t hate taxes – raise your hand. Anyone? Anyone? That’s what I thought. As all of you should know be now, Prince passed away recently in his home from a currently unknown cause. He is survived by a sister and a slew of cousins, aunts, and uncles – as well as an Estate estimated at $300-500 million. And, oh yeah, NO ESTATE PLAN! No will, no trust, nothing.

Without a will, his estate will pass through Minnesota’s intestacy laws and, without any tax planning, will be subject to BOTH federal and Minnesota estate taxes. Ouch.

If her were married, he could have passed the entire estate to his surviving spouse tax-free (until she passes, at least), but since he died single, only the first $1.6 million will pass free of Minnesota estate tax and the first $5.45 million will avoid federal estate tax. The other $298-498 million? It will be subject to 16% Minnesota estate tax and 40% federal estate tax. Again: Ouch.

Obviously Prince is not your everyday intestacy scenario, but his death illustrates what can happen when someone with wealth passes without an estate plan. Prince’s Estate will likely have to sell off a substantial portion of its assets in order to pay that tax bill. Likewise, if a business owner passes without an estate plan and is subject to estate tax, their estate may be forced to sell all or part of the business in order to pay the estate tax liability – and then what is the family left with?

Point being: plan ahead. Don’t let an unexpected and untimely death derail your family’s future.

Author Bio

Paul Yokabitus

Paul Yokabitus is the CEO and Managing Partner of Cary Estate Planning, a Cary, NC, estate planning law firm. With years of experience in estate and elder law, he has zealously represented clients in various legal matters, including estate planning, guardianship, Medicaid planning, estate administration, and other cases.

Paul received his Juris Doctor from the Campbell University School of Law and is a North Carolina Bar Association member. He has received numerous accolades for his work, including being named among the “Best Attorney in Cary” in 2016 and 2017 by Cary News and Rising Star in 2020-2023 by Super Lawyers.

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