Estate Planning Issues for Entertainers
Following Prince’s sudden death, there has been a media firestorm speculating on the division of the late artist’s estate. Prince presumably died intestate, meaning without a will, and a special administrator was appointed by the District Court of Carver County, Minnesota to act in the best interest of the estate until the court can appoint an executor. Prince’s sister, Tyka Nelson, has been acting on behalf of herself and several half-brothers and half-sisters, each of whom will be considered in the probate process.
With an estimated $300 million of liquid assets available and intellectual property rights associated with Prince’s past and unreleased musical works and his likeness, the world anxiously awaits to hear the outcome of the probate proceedings.
The death of an entertainment icon usually creates a stir amongst fans, but for an established star such as Prince the lack of a valid will is distressing. All adult individuals benefit from the security of having an estate plan to carry out their wishes if a sudden emergency or death occurs.
Artists, entertainers, athletes, and politicians are public figures and protecting their family’s privacy is often at the forefront of their estate planning needs. Prince’s estate administration, because he died without a will, will be an on-going public process played out in the probate court and replayed in the media. Implementing estate plans which use revocable (and irrevocable) trusts can help maintain privacy because upon death their terms rarely become public record.
Another aspect of estate planning that differs for artists and entertainers is the treatment of intellectual property rights and contractual terms. An artist’s ownership and their estate’s rights to future revenues from their lifetime works and post-death releases depend on the contractual terms with various music publishers, distributers, managers, and collaborators. In addition there may be copyrights, publication rights, and trademarks with the ability to generate value after death.
Part of an effective estate plan typically involves minimized federal estate taxes, so your property is preserved for the benefit of your heirs. For public figures with estates exceeding the current federal estate tax exemption ($5.45M, if single; $10.9M, if married) planning should be done to minimize their exposure to such death taxes.
Here in Nashville, estate planning attorneys regularly play a key role in assisting artists and entertainers in developing effective estate plans which allow them to determine who will control the management of their estate and designate which loved ones will be provided for, while maintaining privacy, minimizing death and income taxes, and protecting assets from future lawsuits and creditors.