The wrangling over Prince’s estate formally began Tuesday when one of his siblings filed an emergency motion in Carver County District Court to have a special administrator appointed to gather and protect his assets.
The filing by Tyka Nelson said that to the best of her knowledge, her brother left no will. She said that the value of his estate is a mystery at this point.
Lawyers who handle intellectual property and estate planning for other superstars say it may take years to determine the estate’s value — and there’s a possibility that the public may never know.
First off, it’s impossible to say at the moment what Prince was worth when he died, said Paul Bezilla, a lawyer with Lommen Abdo in Minneapolis, a firm that has represented other major celebrities, including Count Basie, Muddy Waters and Bill Haley.
“Someone has to do what we describe as a legal physical. And someone has to determine the depth and breadth of his assets,” Bezilla said.
For an artist like Prince, who worked with many lawyers, accountants and business managers over the years, that won’t be simple, Bezilla said. He noted that Prince not only had physical assets such as land and equipment, but he also owned intellectual property from his lyrics and songs, and trademarks related to his image and brand.
There’s also the question of the value of hundreds of unreleased recordings that Prince kept stored in his vault at Paisley Park in Chanhassen. Their worth would depend on when and how they’re released — decisions yet to be made, Bezilla said.
While the copyrights on most of those recordings would probably expire 70 years after his death, royalties from the use of Princely trademarks could go on indefinitely, he said.
Generally, the administrator of the estate would hire a specialist from New York or Los Angeles to help determined the value, Bezilla said. They would estimate the values based on comparisons to other deceased music legends.
But Bezilla said Prince is a special case, because he’s one of the few major recording artists who owns the copyrights to his own music.
“[Paul] McCartney made that deal with Capitol …, and Prince has that deal. I don’t know of any other artist of that caliber who has that deal. It just doesn’t happen,” said Bezilla, a former general counsel to K-Tel records. “It’s the rare, rare, rare artist who gets to chart their own course and follow it.”
Could top $100 million
Suffice it to say that Prince’s estate will be worth many millions of dollars, Bezilla said.
Ken Abdo, founder and chairman of the firm’s entertainment law department, said if everything is handled properly, Prince’s estate likely could exceed $100 million in value.
Laura Zwicker, who represents individuals with more than $100 million in assets for the Greenberg Glusker law firm in Los Angeles, noted that if Prince put his assets into a private trust, the public may never know how much his estate was worth when he died.
“The will would be irrelevant if the trust was created and funded during his lifetime,” she said. “Everything would remain private. Values would remain private. Disposition of assets would remain private, his wishes would remain private.
“The key takeaway from a number of celebrity deaths over the last couple of years is that really good planning allows the client to maintain privacy after death, and lack of planning sort of causes all of the walls that they’ve built around their life to come tumbling down.”
Many have noted that Prince guarded his privacy closely.
Indeed, records from his divorce from Manuela Testolini were sealed in 2006.
Prince died Thursday at Paisley Park in Chanhassen. Sources told the Star Tribune they are investigating the role opioids may have played in his death. Authorities said Prince was alone when he died and that neither foul play nor suicide was suspected.
Tyka Nelson is Prince’s only surviving full sibling. Her motion lists herself and six half-siblings and a deceased half-sister as his potential heirs. Minnesota law treats full and half siblings the same for inheritance purposes.
Nelson’s filing requests the appointment of Bremer Trust in St. Cloud as the special administrator, noting that it handled Prince’s financial affairs for several years.
Two attorneys for Gray Plant Mooty, who are representing Tyka Nelson, did not respond Tuesday to requests for comment.
Worth a bundle
If Prince left no trust or will, state law determines how the assets will be distributed. Attorneys say the more money there is at stake, the more likely there will be a dispute that could take years to sort out.
For federal tax purposes, the only thing that matters is the value of the estate the day Prince died. By any measure, that’s a bundle.
Carver County property records show that Prince or one of his business entities — Paisley Park Enterprises, PRN Music Corp. and Love 4 One Another Charities — owned 16 properties valued at $31,279,500. The smallest parcel was valued at $95,200.
The largest property, valued at $13,683,800, is 156 acres with access to Lake Lucy and Lake Ann in Chanhassen; he had a residence there but bulldozed it before his divorce from Testolini. Paisley Park, his residence, was valued at $7,013,800.
Years ago, Prince fell behind on his property taxes, but records show that they’re now paid up. Prince also owned real estate elsewhere.
The estate must file a tax return within nine months of the date of death. Federal estate taxes are 40 percent for anything over $5.43 million.
“Coming up with that liquidity in nine months is very difficult if no planning was in place,” Zwicker said. She said the IRS generally will negotiate on the due date, however, if it stands to gain more by waiting.
Prince’s family has some familiarity with the probate courts.
According to court documents, Prince was appointed personal representative of the estate of his father, John Louis Nelson, after his death in August 2001. Siblings Tyka Nelson, Lorna Nelson, Sharon Blakley, Norrine Nolen and John R. Nelson all named Prince as their chosen candidate.
But a few weeks later, Lorna Nelson tried to have Prince removed, alleging that he had undervalued the estate by “an enormous degree” and “has significant conflicts of interest in administering the estate.”
Prince initially listed the assets of his father’s estate as $200 cash. But Lorna Nelson said she later learned that Prince was claiming the assets totaled $329,000 spread out over four bank accounts. Lorna Nelson also claimed that her father had promised her $400,000 shortly before he died at age 85, and said she believed he had additional assets from songwriting royalties, jewelry, musical instruments and a pension from his 30 years as a Honeywell employee.
The dispute eventually was settled and in February 2003, court records show, Prince signed off on an order distributing his father’s estate equally among his five siblings.
Staff writers David Chanen, Emma Nelson, Pam Louwagie and Jon Bream contributed to this report.