Purple Reign: Lessons Learned from Prince

By Morgan Wisted & Barry Neil Shrum

Just over half way through, and already it has been a tough year of losses in the music industry. Glenn Frey, one of the members of my favorite band of all time, the Eagles, kicked off the year early when he passed in January, shortly after the passing of pop icon, David Bowie.  Then, country fans ached greatly at the loss of the “Okie from Muskogee” when the legendary Merle Hagger died on his 79^th birthday.  Later, fans of the Beastie Boys bemoaned the loss of John Berry.   Next came the horrifying news of the senseless murder of American Idol finalist, Christina Grimmie, proving that youth is no more an insulator from the Grimm Reaper than is fame. Finally, comes the loss of Prince, perhaps the greatest pop icon of all, who passed suddenly, thereby reclaiming again his self-proclaimed title of the “artist formerly known as . . . .” So, the collective heart of the industry is indeed heavy as the annual list of dead celebrities for the 59^th Grammy Awards show grows larger.

In death, we are all equal in our solitude, but for our estates the relative differences are significant.  When celebrities set off for that great entertainment festival in the sky, they often leave behind enormous estates: for example, founding member of the Eagles, Glenn Fry left behind an estate estimated to be worth over 90 million dollars when he passed.  While magazines like People, Rolling Stone, and Time quickly assembled the expected tell-alls in memory of the greatest “fill in the blank” to ever live, these entertainment-oriented glamor pieces focus primarily on the glitz and glitter that was the celebrity.  They rarely explore what happens to the wealth and intellectual property of these great icons after the caskets close.  This unique series will examine all of that and more.

Prince may very well be the prime example of the myriad of legal issues that often surround a celebrity’s passing.  On April 21, 2016, the mastermind behind platinum selling albums and years of successful tours, left this world for the afterworld:  a world he so fondly talks about in his hit Let’s Go Crazy.  Although one can assume that Prince has punched his ticket to “a higher floor” and is currently living in that “world of never ending happiness where he can always see the sun, day or night,” here on the ground floor, his family and estate is shrouded in mystery and darkness that result from an unplanned estate.  As the Prince song explains, “…in this life, things are much harder than in the afterworld.  In this life, you’re on your own.”  Well, that last part may not be entirely true:  there were 700 people who claimed to be related to Prince, so they are not “on their own.”  As it is with many celebrities, Prince’s death opened a Pandora’s box of legal issues that will be sorted out for months and even years to come.

Now, the question that everyone seems to be asking in regard to Prince is, where is the will?  Many, including award-winning filmmaker Ian Halperin, have described Prince as a shrewd businessman who would have most certainly been prepared for his eventual demise.  Others, namely his sister, Tyka Nelson, has filed documentation in probate court declaring that he died intestate, i.e., without a will.

In the U.S., each individual state has its own laws regarding what happens to someone’s estate when someone dies without a will.  Since Prince lived in Minnesota, it will be that state’s statute that determines what happens if Tyka Nelson’s claims turn out to be true.  According to Minnesota law, when a person dies intestate, the estate property is distributed according to the so-called “intestate succession laws,” which is basically a flow chart of descendants. The Minnesota’s Heir Flowchart is available here.  As you can see from the chart, since Prince’s parents and only legitimate son, Ahmir Gregory Nelson, are deceased and he has no confirmed children (at least not yet), the first line of descent is his siblings, meaning that Tyka Nelson and his other five half siblings, John Nelson, Norrine Nelson, Sharon Nelson, Alfred Jackson and Omar Baker, stand to benefit the most from the non-existence of a will.

So it’s best not to be too hasty.  The judge in the probate case anticipated that paternity might be an issue, so he ordered DNA testing of Prince’s blood and opened a period of time to allow such children to come forward and stake a claim.   Several have, of course.  There’s Carlin Q. Williams, who claims that he is Prince’s biological son and the “sole heir” under Minnesota statute.  Marsha Henson, Williams’ mother, swore in a statement that she had unprotected sex with Prince in Kansas City, Missouri, in July 1976, after which she conceived Williams.  Another as of yet undisclosed man in his 30’s claims, through Heir Hunters International, that his mother has several sexual encounters with the pop legend in “the 80’s.”  As indicated earlier, over 700 people ultimately came forward claiming to be in Prince’s blood line, including cousins, half-siblings, children, etc.

This is, perhaps, the most damning result of dying intestate, other than of course the actual death itself.  Good estate planning could have avoided this chaotic Minnesota “gold rush” by designating the intended beneficiaries.  Just as important, if not more, than that, however, is the avoidance of estate taxes.

So, for the first installment of this Law on the Row series entitled Purple Reign: Lessons Learned from Prince, let’s review some some good reasons that a celebrity needs quality estate planning.  When someone such as a celebrity, who has acquired a great deal of wealth and assets, passes away, or in fact anytime a great deal of money is involved, you can expect to see a throng of people seeking their alleged share of it.  As we now see, Prince is no different.  With an estimated worth of $300 million, it will not be an easy quagmire for Prince’s family to navigate, and it be littered with numerous pitfalls and challenges as they traverse it. To date, the journey to peace for the Prince Estate has been littered with lost wills, quickly formed publicity rights acts, a vault of unreleased Prince songs, and the aforementioned 700 people claiming to be Prince’s half sibling! So, at least for now, the issue of “where Prince’s fortune will go” is still a mystery.  That leads us to some of our first lessons from the Purple Reign:

1.  Settling estate issues without a will is very expensive and time consuming; best to have the issues sorted out before tragedy strikes;
2. Planning ahead allows a celebrity to structure certain trusts and other legal vehicles designed to reduce and avoid enormous estate taxes; it is estimated that out of the $300 million dollar estate, Prince’s heirs, whoever they may be, will pay upwards to 50% to various governmental agencies, and then even more to court-appointed administrators.
3. Proper estate planning also reduces the problems we see in the Prince fiasco.  If there were a written will, there’d be no doubt to whom Prince wanted his estate to descend.  As it is, the fight will continue and the legal bills will mount.
4. Important descendants may not get anything.  If the celebrity marries a second or even a third spouse, will there be anything available for prior spouses and/or children?  Many intestate laws give everything to the current spouse, leaving prior children and spouses out of the loop, a end result that may be intended by the celebrity.

Just as important, if not more so, when you are dealing with a celebrity, is who has control of the the intellectual properties involved, the copyrights, trademarks, any patents, and of course, the rights of publicity.  When no will is involved, these properties are treated just the same as the money and pass according to the state’s intestate procedure.

So, in Part 2 of the series, will explore the issues surrounding Prince’s copyrights, including the fate of those hundreds of songs and sound recordings waiting to be released to the public.  Who owns those recordings discovered in Prince’s vault?  Can the family release them?  Who owns Prince’s publishing.  Can the family terminate the transfer of any of those rights?

Finally, Part 3 discusses the implications of Prince’s post-mortem rights of publicity.  For anyone familiar with this topic, the hastily formed PRINCE act could very well suffer the same fate the one Washington state assembled on behalf of Jimi Hendrix’ estate, which was ultimately upheld in the 9^th Circuit, but only after a 13-year, hard fought legal battle.  Although these issues are changing and growing daily, we are thrilled to have you follow along with Law on the Row as we begin to wade through the river of issues created by at the end of the Purple Reign, and explore the ever changing laws surrounding the fate of all things Prince.

Morgan Wisted is an intern at Shrum & Associates and has her own blog at www.silkenraven.com.