HOW AN ESTATE PLAN COULD HAVE CARRIED ON PRINCE’S CHARITABLE LEGACY
In the wake of rock & roll legend Prince’s untimely death, a number of issues have arisen regarding his estate plan – or lack thereof. One of the biggest issues is that none of the charities that Prince donated to throughout his life will inherit from his approximately 150 million dollar estate.
CNN Political Commentator, friend, and philanthropic partner of Prince, Van Jones, described Prince as “The Silent Angel.”* During Prince’s lifetime, he anonymously donated millions of dollars to dozens of charities. Unfortunately, since Prince died without a will, the charities that used to receive substantial donations from Prince will inherit nothing. Instead, his estate will be distributed pursuant to Minnesota’s intestacy laws. For those who die without a will, intestacy laws are a state’s default estate plan. The estate is usually distributed among the decedent’s heirs. Prince dying intestate is strange because of the the size of his estate, and his propensity to give to charity.
It is uncommon for someone with an estate as big as Prince’s to not do any kind of estate planning. In fact, those with big estates often do what is referred to as “advanced estate planning.” One advanced estate planning practice is to create a charitable trust. A charitable trust is an estate planning vehicle that can fulfill your philanthropic endeavors, all the while, having your estate receive beneficial tax treatment. There are generally two kinds of people that set up charitable trusts: those who are charitably inclined and those who take advantage of the tax benefits.
For those who are charitably inclined, a charitable trust can and should be tailored to accomplishing your philanthropic undertakings. A charitable trust allows an individual to make charitable donations during life and after death. Setting up a charitable trust is a way to ensure that a charity will continue to receive donations after the settlor has passed away. Other benefits of creating a charitable trust, and an estate plan, include, but are not limited to, avoiding probate, minimizing conflict during trust administration, and fulfilling the settlor’s intent.
For those who are primarily tax-driven, there are various tax benefits of which one can take advantage. In short, there are different kinds of charitable trusts. Each receives different kinds of tax treatment, has different formation requirements, and other distinguishing characteristics. If creating a charitable trust is something that you want to do, or are at least considering, meeting with an experienced estate planning attorney is imperative, because estate planning requires expertise and precision when determining which avenues should be taken. Had Prince set up a charitable trust during his life, not only would the charities that relied upon his generous donations be taken care of, but his estate would be taking advantage of the tax benefits.
Unless a will is found, we will never know how Prince would have wanted his estate to be distributed. It is likely that he would have had wanted a portion of it to go to charity. If you possess a philanthropic disposition, creating a charitable trust is something that should definitely be considered. A few of the benefits of creating a charitable trust are accomplishing your charitable goals, helping those who need it, and receiving tax benefits.
If you are interested in creating a charitable trust or have any questions regarding your current estate plan, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information. The attorneys at Lonich Patton Erlich Policastri have decades of experience handling complex estate planning matters, including charitable trusts, and we are happy to offer you a free consultation. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.