[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.amorusolaw.com\/blog\/princes-estate-hits-the-irs-with-a-million-dollar-lawsuit-greenwich-ct-new-york-ny\/#BlogPosting","mainEntityOfPage":"https:\/\/www.amorusolaw.com\/blog\/princes-estate-hits-the-irs-with-a-million-dollar-lawsuit-greenwich-ct-new-york-ny\/","headline":"Prince\u2019s Estate Hits the IRS with a Million Dollar Lawsuit","name":"Prince\u2019s Estate Hits the IRS with a Million Dollar Lawsuit","description":"\u201cPrince\u2019s sudden death in 2016 triggered numerous court proceedings. First, probate documents had to be filed in court because Prince died without a will.\u201d Filing probate documents was just the beginning of process that still hasn\u2019t ended the bad news from the Prince estate. He did not have a spouse or children, but Prince had […]","datePublished":"2020-11-03","dateModified":"2023-07-29","author":{"@type":"Person","@id":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/#Person","name":"Amoruso & Amoruso LLP","url":"https:\/\/www.amorusolaw.com\/blog\/author\/amorusolaw\/","identifier":5,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/12de032c04195e9c39a06a6d6eea182f7b4fa655c20e245f8094a244b5cdd0cb?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Amoruso & Amoruso LLP","logo":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/07\/amoruso-logo.svg","width":0,"height":0}},"image":{"@type":"ImageObject","@id":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/04\/6a01901dd0a082970b026be41f664e.jpg","url":"https:\/\/www.amorusolaw.com\/wp-content\/uploads\/2023\/04\/6a01901dd0a082970b026be41f664e.jpg","height":750,"width":1050},"url":"https:\/\/www.amorusolaw.com\/blog\/princes-estate-hits-the-irs-with-a-million-dollar-lawsuit-greenwich-ct-new-york-ny\/","about":["Celebrity Estates","Estate Planning","Federal Estate Tax","IRS Fines & fFes","Probate","Revocable Living Trust","Will"],"wordCount":563,"keywords":["Celebrity Estates","Estate Planning","Federal Estate Tax","IRS","Probate","Revocable Living Trust","Will"],"articleBody":"\u201cPrince\u2019s sudden death in 2016 triggered numerous court proceedings. First, probate documents had to be filed in court because Prince died without a will.\u201dFiling probate documents was just the beginning of process that still hasn\u2019t ended the bad news from the Prince estate. He did not have a spouse or children, but Prince had half-brothers and half-sisters, says a recent article from Forbes titled “Prince\u2019s Estate Sues IRS Over Claimed $135 Million Tax Value“. There were a number of claims against the estate, and claims by the estate as well, including a wrongful death action that was eventually dismissed.However, just like anyone else who dies without a will, probate takes a long time and is expensive. Things also get complicated quickly, especially with an estate of this size.One of Prince\u2019s half-sisters, Tyka Nelson, sold a portion of her share of the estate to Primary Wave, a music publisher. So did another sibling. And then the tax troubles began. Cash poor or not, estates must pay a federal estate tax of 40%. A federal estate tax return needs to be filed, and while audits are rare, almost every estate of this magnitude is audited by the IRS. The estate reported a taxable value of $82 million, but the IRS isn\u2019t satisfied.Estate tax fights with the IRS can go on for a long time. Michael Jackson\u2019s estate battle with the IRS is still going on\u2014and he died in 2009.Papers filed by Prince\u2019s estate in the U.S. Tax Court show that the estate reported a taxable value of $82 million, but the IRS claims that the value is really $163 million and wants an additional $38.7 million. In every case, Prince\u2019s estate has obtained appraisals to support its reported values, but the IRS has its own appraisers who disagree.Even if Prince had a will, there still could have been problems. Heath Ledger had a will, but it was five years old when he died and there was no provision made for his daughter. James Gandolfini had a will, but his estate gave the IRS $30 million of his $70 million. These stories make estate planning attorneys cringe. Seymour Hoffman, Heath Ledger, and James Gandolfini\u2019s estates all ended up with wills in probate, which is public, expensive, time-consuming and unnecessary. A will does have to go through the court process, but the use of a revocable living trust could have disposed of their assets outside of probate. A simple pour-over will would have given everything to the revocable trust, simply, and privately in terms of the ultimate inheritance disposition.Estate planning attorneys advise clients to update wills and trusts every time there is a birth, marriage, divorce, etc. It is good advice for both celebrities and regular people.You can give an unlimited amount to your spouse during life or on death. Prince\u2019s estate may face a 40% estate tax, but if he had been married and left his estate to his spouse, there would not have been any federal estate tax until the death of the spouse.A lesson for the rest of us: have an estate plan, including a will and make sure that it includes tax planning.Reference: Forbes (Oct. 7, 2020) “Prince\u2019s Estate Sues IRS Over Claimed $135 Million Tax Value”For more information on asset preservation, tax planning and estate planning, please visit my estate planning website."},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"Blog","item":"https:\/\/www.amorusolaw.com\/blog\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"Prince\u2019s Estate Hits the IRS with a Million Dollar Lawsuit","item":"https:\/\/www.amorusolaw.com\/blog\/princes-estate-hits-the-irs-with-a-million-dollar-lawsuit-greenwich-ct-new-york-ny\/#breadcrumbitem"}]}]