The world may still be mourning the loss of musical pioneer and cultural icon Prince, but that hasn't stopped speculation around the future of the singer's estate -- including the almost 20 properties he owned, valued at an estimated $28 million. The performer was found dead in one of those properties, his Minneapolis-area compound Paisley Park, in April from an overdose of a prescription painkiller.
Last week, the trust managing Prince's estate sought court permission to be able to sell the compound, as well as a slew of other properties owned by the late luminary, TMZ reported. But just a day later, administrator Bremer Trust announced it had no plans to sell Paisley Park, worth about $7 million, or the house featured in the 1984 cult classic flick "Purple Rain."
A trust official said in an affidavit that the homes need to be sold to pay off estate and income taxes and afford the ongoing maintenance and administration bills on the remaining properties, according to the New York Daily News.
Compounding the problem is that no will from the late singer has been found. With potential heirs coming out of the woodwork, it's unclear what will happen to his estate. (A judge threw out claims from 29 alleged beneficiaries last month and ruled eight people could get DNA tests to prove their claims to Prince's estate.)
"Get a plan in place is the biggest lesson learned from Prince's estate," says New York -- based estate attorney Kerrie Horrocks, at Moses & Singer. "You control what happens to your assets, including your real estate and your belongings."
Prince's half-brother Omarr Baker signed an affidavit on Monday claiming he was promised he could live in one of the homes the trust initially planned to sell, the Daily News reported. He had cared for Prince's mother, Mattie Shaw, there until her death in 2002 in exchange for the home, according to the affidavit filed in Minnesota Probate Court.
Another Prince sibling, Alfred Jackson, had been in talks to turn the 60,000-square-foot Paisley Park, located in Chanhassen, MN, into a museum honoring his half-brother, according to the Daily News.
When there's no trust or will and it isn't clear who's in charge, a court will typically appoint an administrator to manage the estate. That administrator then has the power to sell the property or rent it out -- with the goal of transferring the assets to the heirs, Horrocks says.
To avoid these sorts of disputes and confusion, Horrocks recommends that owners of multiple properties consider creating revocable living trusts. The trusts are a lot like wills -- except individuals can still control their properties and make changes to the trusts until their deaths.
But unlike a will, which family members can contest in court if they weren't left what they wanted, trusts are much harder to challenge. And they allow someone to come in and manage the estate immediately, perhaps making decisions on much-needed repairs or sales, rather than leaving it in limbo while a will makes its way through the courts.
The wealthiest 1% who own more than one property in more than one state can also set up limited liability companies (LLCs) for each home that then could be owned by the same trust, says Staten Island, NY -- based estate attorney Richard Luthmann.
This protects the personal assets of wealthy owners if someone slips and falls on their properties and sues. It also gives the rich and famous a bit of anonymity, as their names aren't on the deeds of their land. And if set up correctly, it could protect their heirs from paying potentially hefty estate taxes on inheritances well into the millions.
It seems likely that Prince's heirs, whoever they may be, will wind up shelling out quite a bit for those estate taxes -- an estimated $100 million is due come January, according to the BBC.
That's why when there are multiple homes and multiple heirs, it's often easier to just put the properties on the market, Horrocks says.
"It's easier to distribute cash and everyone can go their separate ways," she says.