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Thread started 04/30/16 11:52am

XrayTed

Over Half of Prince’s Estate Will Go to the Government

Haven't seen this posted yet and I browsed back a couple of pages.

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It appears that the pop star Prince may have died without a will, leaving behind a multi-million dollar and growing estate. Although Prince has one full sister and five half-siblings, Prince’s family members will not be his biggest heirs.

Both the federal government and Minnesota’s state government will assess so-called “death taxes” or estate taxes on Prince’s assets, taking away more than half his estate. Between his physical assets—cash, investments, home, etc.—and his future royalties, Prince’s estate has been estimated to be between $300 and $500 million.

If Prince were married, he could have passed on the entirety of his estate to his spouse tax free. However, without a spouse, only $1.6 million of Prince’s estate will be free from Minnesota’s death tax and only $5.45 million will escape the federal death tax.

The combination of Minnesota’s top death tax rate of 16 percent, plus the federal government’s 40 percent rate, means that over 50 percent of Prince’s estate will go to the government.

http://dailysignal.com/2016/04/29/why-over-half-of-princes-estate-will-go-to-the-government/

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Reply #1 posted 04/30/16 11:54am

purplethunder3
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eek

"Music gives a soul to the universe, wings to the mind, flight to the imagination and life to everything." --Plato
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Reply #2 posted 04/30/16 11:55am

panpac777

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Sucks,I wish he was married still to Manuella or something......
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Reply #3 posted 04/30/16 11:58am

nursev

Messed the hell up...just terrible.

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Reply #4 posted 04/30/16 11:59am

CuddlyBear

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I love how the govenment gets away with taxing money that's already been taxed.

Christopher damn!
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Reply #5 posted 04/30/16 12:04pm

nursev

CuddlyBear said:

I love how the govenment gets away with taxing money that's already been taxed.

exactly

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Reply #6 posted 04/30/16 12:10pm

emesem

My employer at some point paid taxes on the cash they they pay me. Does that mean I dont have pay taxes too?

Just because Prince may have paid taxes on the income that dosn't mean Tyka and the others did. This is not a tax on Prince but rather on the heirs. I dont think I should have to subsidize a group of people are going to inherit a forture for doing nothing.

You think Tyka and all should get all that money and not pay ANY taxes?

nursev said:

CuddlyBear said:

I love how the govenment gets away with taxing money that's already been taxed.

exactly

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Reply #7 posted 04/30/16 12:15pm

darkroman

Even more reason for the estate inheritors to get serious, get organised and plan some commercial releases.

.

Then before too long the estate will even more wealthy.

.

It's such a shame as Prince had created an amazing Empire. I'd hate to see Paisley Park go to ruin - as it will take a lot of money to keep it running.

.

sad sad sad

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Reply #8 posted 04/30/16 12:20pm

funksterr

That article is pretty much an ad, trying to scare the rest of us into various services.

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Reply #9 posted 04/30/16 12:22pm

RodeoSchro

First of all, the government isn't "taxing money that's already been taxed'. The estate tax is a tax on the TRANSFER of wealth from the person who died (Prince) to the person(s) that get his assets (presumably his sister and half-siblings). It is THEY who owe the tax. That's income to the heirs and is taxed as such.

But leaving that aside, it is possible that Prince set up a life insurance trust. This is something that would be done outside the will, so even if there is no will Prince still could have provided for taxes. Here's how it works:

Prince sets up a trust and funds it with money. (It doesn't matter at this point who the trustee - the one who manages the trust - is.) The life insurance trust buys a life insurance policy on Prince. You generally buy a life insurance policy like this for as much as you think estate taxes might be. So if Prince was worth $300 million, then the life insurance trust could have bought a $150 million life insurance policy on Prince.

When Prince died, the life insurance company would pay the $150 million policy proceeds to the life insurance trust. At Prince's death (if not before), the life insurance trustee becomes someone of Prince's designation. (Clearly at this point, if he has such a trust then neither Tyka or anyone else is the trustee, or knows about it.)

The trustee has $150 million which he uses to buy Prince's music rights from the heirs/estate. It's possible the price could be more than $150 million, but the balance would have to be on a note from the trustees to the heirs. Or, the trust could be buying just a 50% interest in Prince's music rights, although that would probably gum up how the music gets released. But anyway now, Prince's heirs have $150 million to pay the estate taxes due.

The life insurance trust now owns Prince's music rights (or a portion of them), and hopefully the trustee is someone Prince wanted to be in charge of releasing his catalogue in the manner he desired.

All this would be done outside the will. So even if there really is no will, Prince could still have provided for his music. I hope he did this (I would be astounded if he didn't) but until we know for sure, don't go nuts over taxes, or the vault, or the absence of a will.

.

[Edited 4/30/16 12:26pm]

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Reply #10 posted 04/30/16 12:25pm

emesem

Good stuff but I doubt that someone who didnt leave a will, was so reckless with his business dealings, seem to think rules were differnet for him, would have had the foresite to have a big payout life insurance policy.

RodeoSchro said:

First of all, the government isn't "taxing money that's already been taxed'. The estate tax is a tax on the TRANSFER of wealth from the person who died (Prince) to the person(s) that get his assets (presumably his sister and half-siblings). It is THEY who owe the tax. That's income to the heirs and is taxed as such.

But leaving that aside, it is possible that Prince set up a life insurance trust. This is something that would be done outside the will, so even if there is no will Prince still could have provided for taxes. Here's how it works:

Prince sets up a trust and funds it with money. (It doesn't matter at this point who the trustee - the one who manages the trust - is.) The life insurance trust buys a life insurance policy on Prince. You generally buy a life insurance policy like this for as much as you think estate taxes might be. So if Prince was worth $300 million, then the life insurance trust could have bought a $150 million life insurance policy on Prince.

When Prince died, the life insurance company would pay the $150 million policy proceeds to the life insurance trust. At Prince's death (if not before), the life insurance trustee becomes someone of Prince's designation. (Clearly at this point, if he has such a trust then neither Tyka or anyone else is the trustee, or knows about it.)

The trustee has $150 million which he uses to buy Prince's music rights from the heirs/estate. Now, the estate has $150 million to pay the estate tax due.

The life insurance trust now owns Prince's music rights, and hopefully the trustee is someone Prince wanted to be in charge of releasing his catalogue in the manner he desired.

All this would be done outside the will. So even if there really is no will, Prince could still have provided for his music. I hope he did this (I would be astounded if he didn't) but until we know for sure, don't go nuts over taxes, or the vault, or the absence of a will.

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Reply #11 posted 04/30/16 12:28pm

bashraka

RodeoSchro said:

First of all, the government isn't "taxing money that's already been taxed'. The estate tax is a tax on the TRANSFER of wealth from the person who died (Prince) to the person(s) that get his assets (presumably his sister and half-siblings). It is THEY who owe the tax. That's income to the heirs and is taxed as such.

But leaving that aside, it is possible that Prince set up a life insurance trust. This is something that would be done outside the will, so even if there is no will Prince still could have provided for taxes. Here's how it works:

Prince sets up a trust and funds it with money. (It doesn't matter at this point who the trustee - the one who manages the trust - is.) The life insurance trust buys a life insurance policy on Prince. You generally buy a life insurance policy like this for as much as you think estate taxes might be. So if Prince was worth $300 million, then the life insurance trust could have bought a $150 million life insurance policy on Prince.

When Prince died, the life insurance company would pay the $150 million policy proceeds to the life insurance trust. At Prince's death (if not before), the life insurance trustee becomes someone of Prince's designation. (Clearly at this point, if he has such a trust then neither Tyka or anyone else is the trustee, or knows about it.)

The trustee has $150 million which he uses to buy Prince's music rights from the heirs/estate. Now, the estate has $150 million to pay the estate tax due.

The life insurance trust now owns Prince's music rights, and hopefully the trustee is someone Prince wanted to be in charge of releasing his catalogue in the manner he desired.

All this would be done outside the will. So even if there really is no will, Prince could still have provided for his music. I hope he did this (I would be astounded if he didn't) but until we know for sure, don't go nuts over taxes, or the vault, or the absence of a will.

Thanks for explaining. There's a lot of logistics and bureacracy that will tie up Paisley Park Studios from future posthumous releases of albums, documentaries and curating of the vault material. Prince's heirs is grieving for their relative and these responsibilities can be a crushing weight for all involved. I think fans need to be more emphatic to family of Prince. Their grief far outweighs greed and fandom.

[Edited 4/30/16 12:28pm]

3121 #1 THIS YEAR
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Reply #12 posted 04/30/16 12:29pm

RodeoSchro

emesem said:

Good stuff but I doubt that someone who didnt leave a will, was so reckless with his business dealings, seem to think rules were differnet for him, would have had the foresite to have a big payout life insurance policy.

RodeoSchro said:

First of all, the government isn't "taxing money that's already been taxed'. The estate tax is a tax on the TRANSFER of wealth from the person who died (Prince) to the person(s) that get his assets (presumably his sister and half-siblings). It is THEY who owe the tax. That's income to the heirs and is taxed as such.

But leaving that aside, it is possible that Prince set up a life insurance trust. This is something that would be done outside the will, so even if there is no will Prince still could have provided for taxes. Here's how it works:

Prince sets up a trust and funds it with money. (It doesn't matter at this point who the trustee - the one who manages the trust - is.) The life insurance trust buys a life insurance policy on Prince. You generally buy a life insurance policy like this for as much as you think estate taxes might be. So if Prince was worth $300 million, then the life insurance trust could have bought a $150 million life insurance policy on Prince.

When Prince died, the life insurance company would pay the $150 million policy proceeds to the life insurance trust. At Prince's death (if not before), the life insurance trustee becomes someone of Prince's designation. (Clearly at this point, if he has such a trust then neither Tyka or anyone else is the trustee, or knows about it.)

The trustee has $150 million which he uses to buy Prince's music rights from the heirs/estate. Now, the estate has $150 million to pay the estate tax due.

The life insurance trust now owns Prince's music rights, and hopefully the trustee is someone Prince wanted to be in charge of releasing his catalogue in the manner he desired.

All this would be done outside the will. So even if there really is no will, Prince could still have provided for his music. I hope he did this (I would be astounded if he didn't) but until we know for sure, don't go nuts over taxes, or the vault, or the absence of a will.


Thanks. I honestly can't imagine Prince not having some estate planning done. I used to work as an investment consultant for a large bank that was, at one time, headquartered in Minneapolis. Prince was a client.

Now, I never saw any of Prince's holdings nor did I even know the investment professionals that he worked with. But I know how we did business with wealthy clients, and I am 100% dead-solid certain that Prince was told about life insurance trusts (among other things). I can only hope he took the advice, but I am absolutely positive this kind of advice was given to him at some point in the mid 2000's.

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Reply #13 posted 04/30/16 12:31pm

RodeoSchro

bashraka said:

RodeoSchro said:

First of all, the government isn't "taxing money that's already been taxed'. The estate tax is a tax on the TRANSFER of wealth from the person who died (Prince) to the person(s) that get his assets (presumably his sister and half-siblings). It is THEY who owe the tax. That's income to the heirs and is taxed as such.

But leaving that aside, it is possible that Prince set up a life insurance trust. This is something that would be done outside the will, so even if there is no will Prince still could have provided for taxes. Here's how it works:

Prince sets up a trust and funds it with money. (It doesn't matter at this point who the trustee - the one who manages the trust - is.) The life insurance trust buys a life insurance policy on Prince. You generally buy a life insurance policy like this for as much as you think estate taxes might be. So if Prince was worth $300 million, then the life insurance trust could have bought a $150 million life insurance policy on Prince.

When Prince died, the life insurance company would pay the $150 million policy proceeds to the life insurance trust. At Prince's death (if not before), the life insurance trustee becomes someone of Prince's designation. (Clearly at this point, if he has such a trust then neither Tyka or anyone else is the trustee, or knows about it.)

The trustee has $150 million which he uses to buy Prince's music rights from the heirs/estate. Now, the estate has $150 million to pay the estate tax due.

The life insurance trust now owns Prince's music rights, and hopefully the trustee is someone Prince wanted to be in charge of releasing his catalogue in the manner he desired.

All this would be done outside the will. So even if there really is no will, Prince could still have provided for his music. I hope he did this (I would be astounded if he didn't) but until we know for sure, don't go nuts over taxes, or the vault, or the absence of a will.

Thanks for explaining. There's a lot of logistics and bureacracy that will tie up Paisley Park Studios from future posthumous releases of albums, documentaries and curating of the vault material. Prince's heirs is grieving for their relative and these responsibilities can be a crushing weight for all involved. I think fans need to be more emphatic to family of Prince. Their grief far outweighs greed and fandom.

[Edited 4/30/16 12:28pm]



My pleasure.

I really, really, really am thinking hard about putting together an investment group and making an offer to handle all this stuff. But it would be a full-time job, meaning I'd have to leave the job I have now, and my boss/wife might not go for that. And judging from the news reports, dealing with some of the heirs might be a poop storm of the highest magnitude.

I'm going to wait a little and see what develops.

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Reply #14 posted 04/30/16 12:38pm

nursev

RodeoSchro said:

First of all, the government isn't "taxing money that's already been taxed'. The estate tax is a tax on the TRANSFER of wealth from the person who died (Prince) to the person(s) that get his assets (presumably his sister and half-siblings). It is THEY who owe the tax. That's income to the heirs and is taxed as such.

But leaving that aside, it is possible that Prince set up a life insurance trust. This is something that would be done outside the will, so even if there is no will Prince still could have provided for taxes. Here's how it works:

Prince sets up a trust and funds it with money. (It doesn't matter at this point who the trustee - the one who manages the trust - is.) The life insurance trust buys a life insurance policy on Prince. You generally buy a life insurance policy like this for as much as you think estate taxes might be. So if Prince was worth $300 million, then the life insurance trust could have bought a $150 million life insurance policy on Prince.

When Prince died, the life insurance company would pay the $150 million policy proceeds to the life insurance trust. At Prince's death (if not before), the life insurance trustee becomes someone of Prince's designation. (Clearly at this point, if he has such a trust then neither Tyka or anyone else is the trustee, or knows about it.)

The trustee has $150 million which he uses to buy Prince's music rights from the heirs/estate. It's possible the price could be more than $150 million, but the balance would have to be on a note from the trustees to the heirs. Or, the trust could be buying just a 50% interest in Prince's music rights, although that would probably gum up how the music gets released. But anyway now, Prince's heirs have $150 million to pay the estate taxes due.

The life insurance trust now owns Prince's music rights (or a portion of them), and hopefully the trustee is someone Prince wanted to be in charge of releasing his catalogue in the manner he desired.

All this would be done outside the will. So even if there really is no will, Prince could still have provided for his music. I hope he did this (I would be astounded if he didn't) but until we know for sure, don't go nuts over taxes, or the vault, or the absence of a will.

.

[Edited 4/30/16 12:26pm]

Very nice-thanks for the clarification.

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Reply #15 posted 04/30/16 1:56pm

violectrica

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Um ok then. PayPal transfer fees are like 3 percent. I like that better.

It had already been taxed unless prince was a tax evader. I'm talking about the money itself not people.

This is punishing someone (Tyka) for Prince dying young.
[Edited 4/30/16 13:58pm]
Trufax: My daddy told me the he and mom went to Purple Rain in a Seattle Theater. They were so moved by the movie that they went into the record store and bought the album immediately. They went home and conceived me.
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Reply #16 posted 04/30/16 2:11pm

XrayTed

I think taxes like this are punitve by nature and are nothing more than a crass $$ grab by the state.

My question is, if Prince had an official will, would this situation been avoided or at least mitigated a bit ? I can see maybe a tax of 4%-6% which would still be a nice haul on a multi million fortune, but to grab half the estate for no other reason than they can is scandalous.

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Reply #17 posted 06/08/16 8:08pm

suomynona

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bumpit

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Reply #18 posted 06/19/16 10:05pm

langebleu

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moderator

Please discuss here: http://prince.org/msg/7/425715

ALT+PLS+RTN: Pure as a pane of ice. It's a gift.
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