July 15, 2016
When the musician Prince died unexpectedly in April, he left behind an estate estimated at $150 million to $300 million — and no apparent will to define what should happen to it. Now, a Minnesota state court may spend years determining his rightful heirs, how his assets should be divided and what taxes his estate will owe.
One of the trickiest questions will be how to place a value on Prince’s name, image and likeness. These entities could continue to reap profits for years to come, if, for instance, a biographical film about his life is produced or his home at Paisley Park is turned into a tourist attraction. There is scant precedent for estimating the potential earnings.
“You’re really talking about what we generally call goodwill — the fame,” says Mooi Lien Wong, Senior Vice President and Regional Trust Manager for U.S. Bank Wealth Management Fiduciary Services.
“It’s a very difficult evaluation, because there’s a wide range of factors that could potentially come into play. And in our society, sometimes people are worth more after they’re dead than when they’re alive.”
One possible consideration in determining the value of Prince’s legacy is the case of Michael Jackson, who died in 2009 and whose estate-tax case is scheduled to begin trial in U.S. Tax Court in February. Jackson’s estate originally valued the pop star’s image and likeness at $2,105 — but the IRS says it is worth $434 million.
When celebrities fail to plan properly for their deaths, their private lives become a source of public gossip. When the actor James Gandolfini, who played Tony Soprano on HBO’s “The Sopranos,” died suddenly in 2013, his loosely drafted will and failure to establish a trust for heirs drew harsh criticism.