Money Matters (May 2016)
By Chuck Dudley
PUBLIC REVELATIONS ARE OPPORTUNITIES TO LEARN
As a nation, there seems to be an obsession with celebrity culture. What are the movie stars wearing?! Tell us about their kids! What beaches are they heading to!!!!
The headlines certainly scream at us. If you are inclined, you will read it. If it’s not a big deal, you won’t.
However, sometimes there are headlines that are eye opening and offer opportunities to learn something about our own lives.
One such headline in the past week is the death of pop star Prince. Specifically, it’s being reported (not confirmed as such) that the multi-millions earning Prince died without a will.
If true, this is quite a surprise. Prince was well known for being in total control of his music and the distribution of it. The distribution of music really means how his product was to be sold. He was reluctant to allow his music to be streamed for free, thus he looked at more non-traditional methods to control his product and fortune.
It is also being reported that he had a tremendous amount of unreleased music. This is important because it is a potential gold mine for future heirs to his fortune. All one has to do is look at the sales Jimi Hendrix, Janis Joplin, Jim Morrison and others racked up after their deaths. Their estates are wealthier today than they ever were in the 1960’s.
It is music………and it is proper business planning.
WHY IS THIS A PROBLEM?
From what has been released so far, he has no children nor spouse, only a sister and some other relatives that stand to inherit this massive musical empire.
Lawyers, accountants, advisors and many others will be attempting to find ways to get involved. To be sure, when there are the millions at stake being reported, and future millions to mine, it will get complicated.
Human nature as it is, a lot of people will want a piece of the Prince pie.
The problem should be pretty evident.
AN OUNCE OF PREVENTION………….
The first place to start would have been to have a will. Very simply, Prince should have had a document that specifically outlined how and where his assets and fortune were to be handled. This is at a minimum.
Maybe these assets should have been placed in trusts, or perhaps a family office structure. The specifics aren’t important, but the estate planning and intent certainly are. If all that we read is true, this estate will probably be tied up in courts and legal proceedings for years.
Some proper planning would have prevented a goodly portion of the pain to come for the survivors.
Given the control Prince had over his music, it will be a shame if he did not properly plan for what the future might hold.
LESSONS, LESSONS, LESSONS
For us common, non-celebrity folk, we should learn from this.
Everyone needs a will at a minimum. We should never leave it to survivors to decipher our intentions. We should state intentions clearly in legal documents to prevent hard feelings of loved ones. And more importantly to preserve a life’s work and wealth and have it distributed and managed as you would want it.
Depending on how you feel about probate, trusts and family offices could be options.
This is when you need your lawyer, advisor and the like……….not after you are gone. And of course, an experienced trust professional.
Recently, I watched a documentary on the Dave Clark Five, another iconic pop band from the 60’s. There are only 2 of the 5 left. But Dave Clark was very business savvy, and the DC5 own all of their music and royalties. I hope he has the proper documents in place.
And we all should. It’s not what we want to deal with every day. But it is what a responsible person would do for all the reasons mentioned above.
It’s time to get started.
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