Prince Rogers Nelson . . . His Estate Controversy

PrincePrince Rogers Nelson, better known to the world as Prince, died on April 21, 2016, at his home at Paisley Park, Minnesota. Prince died without a Will, Trust or any type of estate planning according to court documents filed by his sister, potentially causing big complications for that star’s sprawling financial estate and musical legacy. In probate documents filed with the Carver County District Court in Minnesota, Tyka Nelson, Prince’s sister, said that her brother died without a spouse, children or surviving parents. Ms. Nelson’s petition also listed five half-siblings as heirs, and asked the court to appoint a special administrator for the estate. Minnesota law treats surviving half-siblings the same as full siblings, raising the possibility of a drawn-out family battle.

It is always best to have an estate plan in place that designates who will administer your estate as well as who will receive your assets and under what terms. And, it is important to remember to revise your plan if your wishes or circumstances change.

If you have any questions on estate planning, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.

Making Another Person Joint On Your Bank Account is NOT Good Estate Planning

I received a call the other day from a client who had made her bank account joint with her daughter so that her daughter could access the account on her behalf if needed. My client has a revocable living trust and a durable power of attorney, but choose not to use them for this account for some reason. Now, the daughter is getting divorced and the attorney for the daughter’s husband is claiming that this bank account is marital property and, therefore, part of the divorce settlement. I advised my client to hire an attorney to assist her in proving that the money in the bank account was hers alone and her daughter had never made any deposits or withdrawals to the account.

A better way to handle this bank account would be to retitle the account in the name of the client’s revocable living trust and name her daughter as power of attorney. That way, the daughter is not considered an owner of the account but can access the funds on her mother’s behalf if needed. By titling the account in the trust, the account avoids probate administration up the client’s subsequent demise. Another option would be to keep the bank account in the client’s name alone, name the daughter as power of attorney, and name a transfer on death (TOD) to be the trust or another beneficiary. This would also avoid probate administration. Banks have TOD and power of attorney designations that can be filled out at the bank for people who don’t have trusts or power of attorney documents.

A few years ago, another client had made his son joint on his bank account and a creditor of the son froze the account. Again, the client had to hire an attorney to get it straightened out, which was costly, and he didn’t have the use of the funds until the account was later unfrozen.

These are just two of the many unintended consequences that can occur when you place another person’s name on an asset of yours. Putting another person on the deed to your home can cause capital gains taxes for the other person, along with the same creditor problems mentioned above.

This is why I encourage people to do proper planning, to protect both yourself and your heirs. If you would like to discuss estate planning options, please call to schedule a conference.

If you have any questions, please call Karen L. Stewart, Attorney and Counselor at (248) 735-0900.

For more information, please see my website, www.customestateplans.com.