January 18, 2017

There’s been no shortage of celebrity estate planning blunders in recent years, illustrating that even wealth and celebrity are not protection enough when it comes to planning for the future. So what’s behind the massive estate tax bill? 

The Prince estate is coming up on their deadline to pay the estate taxes for the musical mogul, and it’s believed that up to half of the $200 million estate would be swallowed up immediately with a payment to Uncle Sam. One of the biggest reasons for this preventable tax situation is that Prince left no will and therefore did no planning ahead to shelter any of his assets from the government.

Taking no action can be detrimental for any estate, but the stakes are higher for anyone with substantial assets like Prince. When he passed away, the estate became subject to Minnesota’s 16 percent state tax and a federal tax rate of 40 percent. Adding in deductions and exclusions, the federal government’s cut will likely be closer to 50 percent of the total estate value.

While the size of Prince’s estate certainly makes the issues much more serious in this case, it’s a good example of the value of estate planning for anyone. Taking no action at all can prove catastrophic and add further grief and frustration for your loved ones. There’s a good chance you have plans and ideas for your estate but that you also want to minimize any challenges your loved ones experience, too.

Thankfully, action steps now can make things easier for everyone in the future. Contact an experienced estate planning lawyer in New Jersey to talk further about strategies that you can use to minimize taxes and make the administration of your estate easier on loved ones.