Buy Prince’s Music Now- While You Can
If you love Prince’s music, buy it now. A legendary artist, he transformed music, music television, and the music industry as a whole—and getting your fix of this musical genius in the future could become next to impossible. This is because his passing has introduced a larger question into the fold: Who will control Prince’s estate- and therefore, his music?
His Paisley Park estate is conservatively valued between $250-$300 million, and it’s unclear who will manage it moving forward. The answer to this is could put your ability to jam to your favorite Prince masterpieces in limbo for the foreseeable future.
Why would it be more difficult to enjoy his music? The roadblock is whether or not Prince properly completed “end of life planning” in the form of estate and/or beneficiary documents and last wish directives. Right now, there is little indication that he has.
(To learn more about the 30 Documents You Need Before You Die, please review our free infographic. Your beneficiaries will thank you.)
It can take months or years for estate documents to surface—and this is true even from the estates of those who aren’t as private as Prince Rogers Nelson was. What is known is that Tyka Nelson, Prince’s sister, has filed with the court to appoint a special administrator to manage Prince’s “substantial assets consisting of personal and real property that requires protection.” Her court request goes on to say that he, “owned and controlled business interests that require ongoing management and supervision.”
Prince had no spouse or children, however in the state of Minnesota, siblings and half-siblings are treated equally in their beneficiary status. That means today, there are six “interested parties” and each can potentially receive one-sixth control over his estate if no other directives were set in place.
His assets include a variety of real estate, tangible property, investments, personal and business assets, control of image and brand rights, intellectual property, other properties and, of course, an enormous collection of released and un-released music—some of which Prince had full ownership rights, and some that had co-ownership with Warner Music Group and potentially other interested parties.
To complicate matters, Prince’s music is entangled in ownership and distribution copyrights internationally. Prince regained the copyrights for his catalogue in the US in 2014 when he settled copyright issues with Warner Music Group, however he was unable to secure the rights to overseas copyrights. This means that future legal distribution of Prince’s music will be disorganized and disproportionate at best.
If you thought building out your essential Prince collection was difficult previously because of the extreme care he paid his property and brand, this will seem like nothing in comparison to the control over the same music, silenced because of embroiled legal battles between potential heirs. This highlights the importance of having end of life instructions outlining your wishes for your properties.
When you do not have some sort of directive in place, your estate ends up going through what is called the probate process. Probate is a lengthy, public process that is played out in the state courts. Probate is not only public and contestable, but complete control of who receives the assets as a beneficiary is decided by the courts.
Oftentimes, court appointed administrators are not aligned with who the decedent would have chosen for themselves, and often are not aligned with the wishes of the intended beneficiaries. Additionally, if assets go through probate and have no financial plan in place, the taxation on the assets can be astoundingly high.
For instance, if no financial plan exists for Prince’s estate, held in the state of Minnesota, his $300M estate will pay approximately $120M in state and federal taxes. That cuts the value of the estate, potentially, in half. The remaining amount will be tied up in the courts, with the largest beneficiary likely being the legal representatives of his six beneficiaries.
Unfortunately, the financial devastation of such litigation often lasts generations, not to mention the high likelihood that all parties and their heirs could be bankrupted by the burden of carrying the costs of legal representation and taxation on the estate before it can be disbursed accordingly. All six entities or (upon death) their heirs, must be aligned in all business decisions representing the estate, forthcoming.
It’s not just the family that could lose out on Prince’s legacy. If, in fact, no “end of life directives” exist (in the form of contracts, trusts/irrevocable living trust, co-ownership status, end of life designations or verifiable will) for Prince’s music catalogue, the future of his music will be decided by all six beneficiaries. Here too, they must all be in agreement on every point of contention, along with any co-owners of music rights, such as Warner Music. This is potentially an endless foray of negotiations, compromises, disagreements and stalemates.
If the value of his estate is in intangible assets, such as the revenue produced by the distribution of his music, brand, image, and intellectual property, it must be distributed to produce income to the beneficiaries. Many experts believe having $100M in liquid assets is unlikely for Prince’s estate. The bulk of his estate is most plausibly based on the income produced by his brand and music distribution.
A lack of income from the assets will be burdensome for the beneficiaries, likely compelling them to sell the assets off incrementally. Again, all parties will have to agree to all terms or continue with additional litigation. No unified agreement means that the music you stream, hear on the radio, or purchase will be minimally accessible. That lack of income is not in the best interest of the estate’s viability.
The public will fervently want to consume his music in the coming weeks and months. If the music catalogue is tied up in the court system due to disagreements between the beneficiaries, music lovers will ultimately lose access to his music for the foreseeable future—to the financial detriment of his estate.
The potential true consequences of this sudden loss of an icon has implications that extend beyond even Prince’s fans or his beneficiaries. The devastating loss is for a man who valued independence above all. He maintained a fervent desire for autonomous control over his master recordings, of his image and of his brand- so much so that he even legally, for a time, changed his name to a symbol, and was henceforth often referred to as TAFKAP (The Artist Formally Known As Prince). This is a man who endlessly scoured the internet to remove un-proprietary recordings, constantly suspicious of any entity trying to monetize his music or his brand for personal gain.
If no end-of-life directives are in place, or cannot be found, his estate wishes are likely to stand un-honored, potentially doing irreversible damage to the closely held brand he worked so hard to build. The beneficiaries will most certainly be the federal and state governments, and the legal representation of the approved as beneficiaries of his estate.
Our hope is that, in fact, his last will and testament, trust or contracts have been spelled out and that they will surface. In the meantime, honor Prince’s legacy while you know you can. Pick up your favorite legally produced albums. Make them part of your estate. Your children and grandchildren will thank you for it.
- “Prince died without a will, sister says.” Maria Puente, USA Today, 4.26.16: http://www.usatoday.com/story/life/music/2016/04/26/prince-had-no-will-sister-says/83545078/
- “The singular legacy of Prince.” John Jurgensen, Hannah Karp, WSJ, 4.22.16, Arena, D1.
- Despite the incredible array of Prince’s music and video recently available on YouTube, which could enhance this article and your day, we will not share them here out of our own respect for his intent for privacy that was displayed while he was alive. Four years ago a video was published where he did honor the late George Harrison, including Harrison’s son, on behalf of the Rock & Roll Hall of Fame: https://youtu.be/6SFNW5F8K9Y We feel confident Prince allowed this third party video to remain published. He appears at 2:15 with the gorgeous red hat. Wait for 6:15. It is absolutely Prince personified. We feel sorry for any intern or employee who did not catch his guitar. With greatest respect, and admiration, we share this gorgeous rendition of “While My Guitar Gently Weeps.” Enjoy.
Tags: 30 Documents, 30 Documents You Need Before You Die, Certified Financial Planner, CFP, end of life planning, estate, Financial Planning, Irrevocable Living Trust, Living Will, music contracts, prince, TAFKAP, Trust