WEBVTT - With No Will, Prince Estate at Risk (Audio)

0:00:00.960 --> 0:00:03.880
<v Speaker 1>Prince was an icon, one of the best selling artists

0:00:03.880 --> 0:00:06.320
<v Speaker 1>of all time, and many of the songs are part

0:00:06.320 --> 0:00:22.840
<v Speaker 1>of modern culture. But Prince zealously guarded his music. He

0:00:22.920 --> 0:00:25.840
<v Speaker 1>broke with his record label, changed his name to a symbol,

0:00:25.920 --> 0:00:29.360
<v Speaker 1>got back his original master recordings, and pulled his songs

0:00:29.400 --> 0:00:32.600
<v Speaker 1>off streaming music services, all to make sure that only

0:00:32.720 --> 0:00:36.440
<v Speaker 1>he controlled his art. It's a sad irony that Prince

0:00:36.440 --> 0:00:39.239
<v Speaker 1>will have absolutely no say in what happens to his

0:00:39.360 --> 0:00:42.000
<v Speaker 1>music after his death. Though he was quick to hire

0:00:42.080 --> 0:00:44.680
<v Speaker 1>lawyers to protect his music while he was alive, he

0:00:44.800 --> 0:00:47.360
<v Speaker 1>did not hire a lawyer to draw up a will,

0:00:47.720 --> 0:00:50.600
<v Speaker 1>leaving no instructions on how he wanted his music and

0:00:50.840 --> 0:00:54.360
<v Speaker 1>estate handled. My guests are Terence Ross, a partner at

0:00:54.400 --> 0:00:58.640
<v Speaker 1>Captain Euten Rosamond, and Laura's Wicker, a partner at Greenberg Glusker.

0:00:59.240 --> 0:01:01.600
<v Speaker 1>Laura Prince is a state has been said to be

0:01:01.680 --> 0:01:05.160
<v Speaker 1>worth as much as two million dollars, with a catalog

0:01:05.280 --> 0:01:09.760
<v Speaker 1>of about a thousand songs. What's happening now to value

0:01:09.800 --> 0:01:16.200
<v Speaker 1>the estate? Well? Um, his executors will be filing or

0:01:16.319 --> 0:01:18.240
<v Speaker 1>preparing to file with the I R S and a

0:01:18.319 --> 0:01:23.280
<v Speaker 1>state tax return. Um. They'll be working to establish a

0:01:23.440 --> 0:01:27.120
<v Speaker 1>value for his catalog that's in his name and likeness,

0:01:27.160 --> 0:01:30.720
<v Speaker 1>that's reasonable. Um. We've seen in the Michael Jackson estate

0:01:30.880 --> 0:01:34.679
<v Speaker 1>where m his executors valued name and likeness such as

0:01:34.760 --> 0:01:37.960
<v Speaker 1>two thousand dollars, a big blowback from the I R S.

0:01:38.440 --> 0:01:42.279
<v Speaker 1>So I'm sure that Prince's legal advisors or the legal

0:01:42.319 --> 0:01:44.720
<v Speaker 1>advisors for his executors will have their eye on that

0:01:45.120 --> 0:01:48.840
<v Speaker 1>and try to come up with a reasonable but perhaps

0:01:50.000 --> 0:01:54.840
<v Speaker 1>lower number UM for for Prince's name and likeness, his

0:01:55.000 --> 0:01:59.640
<v Speaker 1>music catalog, and the balance of his assets. Terry. Since

0:01:59.680 --> 0:02:04.720
<v Speaker 1>Prince was notoriously protective of his music, is his legacy

0:02:04.880 --> 0:02:08.639
<v Speaker 1>being protected at all? Or is it a dash for cash?

0:02:08.840 --> 0:02:12.079
<v Speaker 1>It really is a dash for cash. From what I've

0:02:12.120 --> 0:02:16.000
<v Speaker 1>read in the popular press. The executors are attempting during

0:02:16.040 --> 0:02:21.000
<v Speaker 1>the period of their administration, are attempting to maximize the

0:02:21.320 --> 0:02:28.200
<v Speaker 1>revenue from both the publishing catalog, the recordings, and his likeness.

0:02:28.520 --> 0:02:31.920
<v Speaker 1>He during his lifetime, Prince did not allow his image

0:02:32.200 --> 0:02:35.680
<v Speaker 1>or likeness or name to be used for commercial purposes,

0:02:36.240 --> 0:02:39.120
<v Speaker 1>and they are now out there trying to do deals

0:02:40.080 --> 0:02:43.560
<v Speaker 1>involving his his likeness, his image, and his name on

0:02:43.680 --> 0:02:47.640
<v Speaker 1>top of licensing UM the catalog of songs, and those

0:02:47.720 --> 0:02:52.160
<v Speaker 1>deals may well be multi year deals that the heirs,

0:02:52.280 --> 0:02:57.400
<v Speaker 1>whoever the air eventually is determined to be, are stuck with. So, Laura,

0:02:58.200 --> 0:03:02.959
<v Speaker 1>since he was protective of is likeness, it doesn't matter

0:03:03.000 --> 0:03:05.799
<v Speaker 1>that everyone knew he was protective of his life likeness.

0:03:05.840 --> 0:03:07.760
<v Speaker 1>Are we still going to see his face on T

0:03:07.919 --> 0:03:13.480
<v Speaker 1>shirts and cups and maybe in ads? Whatever the executors

0:03:13.560 --> 0:03:16.320
<v Speaker 1>determined is in the best interests of the estate, and

0:03:16.400 --> 0:03:19.280
<v Speaker 1>the best interests of the estate are to maximize value.

0:03:19.360 --> 0:03:24.400
<v Speaker 1>So yes. Unfortunately, unless you create an estate plan that

0:03:24.720 --> 0:03:28.920
<v Speaker 1>directs control of your name and likeness as well as

0:03:28.960 --> 0:03:32.440
<v Speaker 1>your other assets UM, your executors are left with a

0:03:32.480 --> 0:03:37.560
<v Speaker 1>fiduciary duty to maximize value for whoever your beneficiaries are.

0:03:38.560 --> 0:03:42.040
<v Speaker 1>And Laura's speaking of beneficiaries, Prince had a sister, a

0:03:42.080 --> 0:03:46.560
<v Speaker 1>half brother, and four step siblings. How will the estate

0:03:46.640 --> 0:03:52.200
<v Speaker 1>be distributed among them? So my understanding of Minnesota law

0:03:52.480 --> 0:03:55.520
<v Speaker 1>is that the step siblings would share as full siblings,

0:03:55.600 --> 0:04:00.240
<v Speaker 1>although I know that there has been UM discover ory

0:04:00.440 --> 0:04:05.160
<v Speaker 1>and is already some dispute about who UM is going

0:04:05.200 --> 0:04:07.800
<v Speaker 1>to take as an heir, And so the probate court

0:04:07.840 --> 0:04:10.880
<v Speaker 1>in Minnesota is going to determine airship in this case,

0:04:11.040 --> 0:04:14.800
<v Speaker 1>because again Prince didn't have a state planning documents that

0:04:14.920 --> 0:04:19.160
<v Speaker 1>set out who he wished to benefit Terry. Can you

0:04:19.240 --> 0:04:21.680
<v Speaker 1>and this is a question that has been asked and

0:04:21.839 --> 0:04:25.320
<v Speaker 1>will never get a real answer, but why someone who

0:04:25.560 --> 0:04:29.400
<v Speaker 1>spent so much money paying lawyers to protect his music

0:04:30.000 --> 0:04:34.560
<v Speaker 1>and his rights wouldn't have a document even indicating what

0:04:34.600 --> 0:04:38.520
<v Speaker 1>he wanted after his death. It's really criminal. And you

0:04:38.560 --> 0:04:42.599
<v Speaker 1>would have thought, because of the good legal representation he

0:04:42.680 --> 0:04:45.280
<v Speaker 1>had in the many UH disputes he had as to

0:04:45.360 --> 0:04:48.320
<v Speaker 1>how his his his music was being used, that one

0:04:48.360 --> 0:04:51.159
<v Speaker 1>of those lawyers would have said, hey, have you done

0:04:51.160 --> 0:04:55.000
<v Speaker 1>any planning with respect here state? UH. And it's not

0:04:55.120 --> 0:04:57.320
<v Speaker 1>like there aren't a lot of examples out there. There

0:04:57.320 --> 0:05:01.040
<v Speaker 1>are a number of bands and artists recording our who

0:05:01.120 --> 0:05:02.800
<v Speaker 1>have paved the way in this area. He could have

0:05:02.839 --> 0:05:06.240
<v Speaker 1>set up a foundation UM, or he could have set

0:05:06.320 --> 0:05:10.240
<v Speaker 1>up a trust and then UM had these assets pour

0:05:10.360 --> 0:05:14.159
<v Speaker 1>into those um upon his death and put in place

0:05:14.200 --> 0:05:17.360
<v Speaker 1>a trustee or somebody in charge of the foundation with

0:05:17.640 --> 0:05:22.880
<v Speaker 1>very explicit instructions as to how to license the works

0:05:22.920 --> 0:05:26.320
<v Speaker 1>and license his likeness. And he didn't do any of that.

0:05:26.360 --> 0:05:29.800
<v Speaker 1>It's just very puzzling. Jim, Laura, have you ever had

0:05:29.839 --> 0:05:32.080
<v Speaker 1>a case you work in a state planning, have you

0:05:32.120 --> 0:05:36.200
<v Speaker 1>ever had a case where someone found it difficult to

0:05:36.240 --> 0:05:39.200
<v Speaker 1>come to an agreement about the state, or you know,

0:05:39.279 --> 0:05:41.440
<v Speaker 1>came to you and then said, well I can't do

0:05:41.520 --> 0:05:49.080
<v Speaker 1>this now. Yeah. Um, I had a client who had

0:05:49.160 --> 0:05:53.599
<v Speaker 1>end stage diabetes and had a very significant estate. UM

0:05:54.440 --> 0:05:59.679
<v Speaker 1>and his wife came in. We created a state planning

0:05:59.720 --> 0:06:03.120
<v Speaker 1>doctor months for them. That would have protected their privacy,

0:06:03.160 --> 0:06:08.120
<v Speaker 1>That would have made um her life after his passing

0:06:08.160 --> 0:06:13.680
<v Speaker 1>really simple. UM. But despite many meetings and many phone

0:06:13.680 --> 0:06:16.799
<v Speaker 1>calls he enjoyed calling to talk, he could not sign

0:06:16.839 --> 0:06:19.479
<v Speaker 1>the documents and so we were left with a very

0:06:19.560 --> 0:06:27.400
<v Speaker 1>significant intestacy. Now, Terry, what happens after whords? It goes

0:06:27.440 --> 0:06:31.240
<v Speaker 1>to the I R s and then Mike. There's still

0:06:31.279 --> 0:06:35.040
<v Speaker 1>funny about Michael Jackson's the state. I believe there are

0:06:35.360 --> 0:06:36.960
<v Speaker 1>I mean, I don't know how many years that's been.

0:06:37.000 --> 0:06:41.120
<v Speaker 1>But part of it is because a state took such

0:06:41.240 --> 0:06:45.880
<v Speaker 1>an aggressive position with respect the valuation of the assets

0:06:45.960 --> 0:06:48.240
<v Speaker 1>that the I R S said, oh, come on, UM,

0:06:48.279 --> 0:06:52.040
<v Speaker 1>We're we're gonna call you on that one and litigated UM.

0:06:52.160 --> 0:06:56.000
<v Speaker 1>Here it sounds like they're doing the exact opposite, that

0:06:56.000 --> 0:07:00.400
<v Speaker 1>they're aggressively maximizing revenue UM and to the extent they

0:07:00.440 --> 0:07:03.960
<v Speaker 1>get these deals done quickly, UM, they'll have a concrete,

0:07:04.000 --> 0:07:08.800
<v Speaker 1>market based valuation of what the assets are worth. But

0:07:08.880 --> 0:07:10.920
<v Speaker 1>at the end of the day, you know, the real

0:07:11.000 --> 0:07:13.560
<v Speaker 1>winner out of all of this is the internal Revenue

0:07:13.600 --> 0:07:17.560
<v Speaker 1>Service Because all of the state planning um that we've

0:07:17.560 --> 0:07:20.360
<v Speaker 1>been talking about did not get done. There are many

0:07:20.440 --> 0:07:24.000
<v Speaker 1>mechanisms where you can avoid big tax bills to the

0:07:24.040 --> 0:07:28.800
<v Speaker 1>i RS. That happened, Laura about thirty seconds left. I

0:07:28.920 --> 0:07:31.400
<v Speaker 1>understand that the taxes are going to be about fifty

0:07:31.840 --> 0:07:37.600
<v Speaker 1>of the estate. Is that about right? Um? About a

0:07:37.720 --> 0:07:41.080
<v Speaker 1>huge chunk. Still, thank you so much for being with us.

0:07:41.200 --> 0:07:44.840
<v Speaker 1>Laura's Wicker. She's a partner at Greenberg Glusker. Terry Ross

0:07:44.880 --> 0:07:47.520
<v Speaker 1>is going to stay with us. As we're talking coming

0:07:47.600 --> 0:07:51.160
<v Speaker 1>up about Paul McCartney suing Sony to gain control of

0:07:51.200 --> 0:07:53.880
<v Speaker 1>the Beatles back catalog of music, and he's using a

0:07:53.960 --> 0:07:58.040
<v Speaker 1>legal tactic that Prince once used. I'm June Grossel. You're

0:07:58.080 --> 0:08:01.880
<v Speaker 1>listening to Bloomberg Law. This is Bloomberg b