Bowen Buchbinder Vilensky

Who Inherits Prince’s Diamonds and Pearls?

This one (2)

By Laura Di Cristofaro, Solicitor at Bowen Buchbinder Vilensky Lawyers

9 May 2016

Despite achieving the status of music royalty, Prince’s untimely death at the young age of 57 years has once again highlighted the simple fact that no one can avoid the emotional and financial hardship invariably suffered by a deceased’s family when the deceased dies without a Will.

Whilst hard to believe that a superstar of Prince’s status would not execute a single document to say who inherits his wealth,  his family have filed papers to declare that Prince died without a Will. This means that Prince died ‘intestate’ and his family and the Courts are left to deal with the resulting mess that is likely to take years to sort out.  Whilst there have been many tributes in the media as of late, the media is more consumed with the twists and controversies of Prince’s intestate estate – not a legacy that Prince is likely to have wished to leave behind.

So, the question is, what happens to Prince’s ‘Little Red Corvette’ and other assets?

Prince’s Estate will be distributed in accordance to the laws of intestacy (in Minnesota).  Had Prince died in Western Australia however, there is a formula imposed by section 14 of the Administration Act 1903 that dictates who inherits the Estate and in what proportions. Although each person’s intentions are different, it is very unlikely that this formula will mirror exactly what each person wishes to happen to their estate.

Relying on the section 14 formula can be problematic in many different scenarios, including for blended families, de facto partners or even for a widowed spouse. For example, if Prince died in Western Australia leaving a wife and children, the wife would receive a statutory legacy of $50,000 and one third of the remainder of the Estate. The other two thirds would be divided between his children. For many widows or widowers left behind, $50,000 plus a third of the Estate would not be a sufficient distribution.  In fact, the statutory legacy of $50,000 has not increased since 1982.  The sum of $50,000 was definitely a ‘Sign o’ the Times’ in the 1980′s as it represented the median house price was considered a sufficient distribution.

If a beneficiary is not sufficiently provided for by the section 14 formula, their only recourse is to commence proceedings under the Family Provision Act 1972, which normally incurs significant legal costs and lengthy delays in finalising the Estate.

The lesson to learn from this unfortunate story is that everyone should have (at the very least) a basic estate plan.  This is even more so the case with respect to those individuals with interests in entities such as businesses and family trusts. By delaying the crucial exercise of making a Will, you run the real risk of dying intestate.  A current and complete estate plan, including an up to date and valid Will,  is vital to your estate being distributed in accordance with your wishes and in an efficient and cost effective mannerwhilst at the same time protecting potentially vulnerable beneficiaries and the estate assets at a time where arguments over money should not take precedence over mourning the loss of a loved one. 

Please contact Laura Di Cristofaro at ldicristofaro@bbvlegal.com.au if you wish to discuss your estate planning objectives.

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