Minnesota Estates Court to Discuss “Final Allocation” of Prince’s Estate in February
The marathon resolution of Prince’s estate seems to be approaching its last mile.
The administrators of the late musician’s estate recently settled a complicated dispute with the Internal Revenue Service over the value of Prince’s assets. The precise value was not disclosed, although it may exceed $ 100 million.
Meanwhile, the Carver County Estates Court is expected to begin in February discussing a “final distribution” of Prince’s assets among his heirs and beneficiaries.
Prince died of a fentanyl overdose in April 2016 without a will. Since then, a phalanx of lawyers and consultants have received tens of millions of dollars to administer their estates and develop a distribution plan.
The estate will be divided almost evenly between a well-funded New York music company – Primary Wave – and the three oldest of the music icon’s six heirs or their families.
Primary Wave bought out all or most of the interests of Prince’s three younger siblings, one of whom died in August 2019. Three older siblings – one of whom died in September – rejected the Primary Wave offers.
Comerica Bank & Trust, the administrator of Prince’s estate, and the IRS have settled their disputes over the value of Prince’s estate, according to a case filed in late November in the United States Tax Court. The deal has yet to be approved by the Carver County Estates Court.
Terms of the tax settlement were not disclosed. Lawyers for Comerica declined to comment.
A separate tax dispute between Prince’s estate and the state of Minnesota does not appear to be resolved yet.
Last year, the IRS determined that Prince’s Kingdom was worth $ 163.2 million, about twice as much as Comerica’s $ 82.3 million valuation.
Comerica’s valuation was so low that the IRS imposed a $ 6.4 million “accuracy penalty” on the estate.
Comerica in turn sued the IRS in the United States Tax Court, claiming the IRS’s calculations were riddled with errors. With the settlement, a tax trial scheduled for March in Saint-Paul was canceled.
Instead, a U.S. Tax Court judge ordered Prince’s estate and the IRS to file a status report on the case in late February.
The IRS and Comerica agreed last summer to value Prince’s real estate at around $ 33 million. Then they turned to the more delicate task of valuing intangibles, such as the rights to Prince’s music.
The comprehensive IRS settlement likely prompted the probate court to schedule a hearing in February on the “final distribution of [Prince] estate, “said Michael Smith, an estate planning attorney at Larkin Hoffman in Minneapolis who is not involved in the case.” With the settlement, you now know how much money is going to come out.
Yet a final court-approved cast could take months, not weeks. Indeed, no real distribution plan has been filed in Prince’s homologation file.
“Looks like they could get together [at the February hearing] just to talk about the process, “Smith said.” How do you wrap this up? “