What if Prince died in Florida?
Prince, whose legal name is Prince Rodgers Nelson, died on April 21, 2016. His sister reports that he died without a will and was survived by herself, a full blood sibling, and five (5) half-blood siblings. He was predeceased by a half-blood sibling. If Prince resided in Florida, what would happen to his estate?
Four immediate consequences
Before examining what would happen, as a result of Prince dying intestate, let’s examine what does not happen.
- A Personal Representative is not named, so one must be appointed.
- No one is immediately able to manage Prince’s financial affairs, especially estate assets.
- If minors are to receive assets, there are no instructions on how and when those assets are to be distributed.
- The opportunity to save estate taxes may have been lost.
Distribution to siblings
Dying without a will means that an intestate estate arises. Florida Statutes have rules for who is to receive property by intestate distribution. In this case, the intestate share will pass to the decedent’s brothers and sisters and the descendants of the deceased sibling. In Florida, if some of the siblings are of the whole blood and others are of the half-blood, the half-blood siblings inherit only half as much as the whole blood siblings. It is unknown if Prince’s predeceased half-sibling had any surviving descendants. Let’s assume the predeceased half-sibling had two children who survived Prince. In this case, Prince’s sister would receive one full share and six half shares would be divided among the living half-siblings and the children of the predeceased half-sibling. In total, four shares would come into being (one full-share and six half shares). Prince’s sister would receive one-quarter of his probate estate. Each of the surviving half-siblings would receive one-eighth of his probate estate and his nieces and nephews from his predeceased half-sibling would receive one-sixteenth of his estate.
If Prince’s nieces and nephews from his half-sibling are minors, a guardian would need to be appointed for them to receive the inheritance. If Prince had a will, he could have provided for trust provisions setting forth the terms of who would manage the minors’ assets and when the assets would be distributed.
If there is no will, who determines the personal representative?
Because Prince died without a will, a personal representative is not named to administer his probate estate. The preference for appointing a personal representative in Florida, when there is not a surviving spouse, is the person selected by a majority in interest of the heirs of the estate, and if they cannot agree upon a personal representative, the heir nearest in degree. Although, it would appear to make sense that Prince’s sister, a full sibling, should be appointed, if the heirs receiving more than half of the property select another person, the court may grant preference to that person. At the end of the day, the court will decide the person to serve as personal representative. This could be a relative, a business partner who resides in Florida, or a bank or trust company licensed to do business in Florida. Note that only relatives or Florida residents are permitted to serve in Florida; an individual who is not a relative and does not reside in Florida may not serve as a personal representative.
All is not lost
Only probate assets will be subject to the estate administration process. These are generally assets that would be owned in Prince’s own name, without a beneficiary designation and not subject to other agreements. The probate process does not control the disposition of non-probate assets. These are generally assets which pass by contract with a beneficiary designation, such as life insurance, annuities and retirement accounts, assets which are payable on death or transferrable on death, or jointly owned assets. Prince’s business assets may be subject to written agreements with the business entity or his business partners and the disposition of them may be controlled by an operating agreement, shareholders agreement or other forms of business contract.
We will have to wait and see how the disposition of Prince’s assets ultimately plays out. A will may be produced, individuals claiming to be Prince’s children may appear, and agreements such as a trust or business agreement may be produced. If any of the aforesaid occurs, it could significantly change the currently perceived distribution of Prince’s estate.
The moral of the story is that everybody should have an estate plan in place. A plan that carries out the desired distribution of their estate, names the proper people to be in charge of estate assets, creates trusts for beneficiaries who are young, disabled or otherwise impaired and saves taxes. When it comes to putting in place an estate plan, don’t be a prince, be a king.