When I first posted about Prince’s estate, I did not intend to continue providing updates. However, as administration of the estate continues, more and more opportunities arise to discuss how things could have been handled differently (and in many ways, better) with a proper estate plan. Earlier this month, the estate filed an inventory listing the assets of the estate. What is an inventory, and why do people care?
The inventory is put together as a logical and necessary step to determine what assets the estate has. This is necessary to know what assets are available to pay creditors and to ultimately distribute to beneficiaries. The concern for some is that the inventory in an estate becomes a public record (and not just because Prince is a celebrity).
Remember, an estate is a formal procedure through the court system of the state where the individual died or owned property. (If the deceased owned real estate in more than one state, there may be more than one probate). Within a specified time period after opening the estate, the representative of the estate files an inventory describing each asset owned by the estate and its value.
An inventory is relatively detailed. For example, for real estate, the inventory includes the legal description of the property. For vehicles, it includes the make and model. Each bank account and investment account is listed separately with the type of account, the value on date of death, and in some cases, the beneficiary listed on the account. Like other court filings, once filed this becomes a public record. The description of each and every asset and the value are public record, for any person to view.
In Prince’s estate, many of the assets listed on the inventory do not yet have a value listed, because the personal representatives are still in the process of obtaining a valuation. As you may expect, some of the items are very difficult to value, such as his artwork, memorabilia, musical instruments, the rights to his music (including unreleased music), and the “Purple Rain” motorcycle. Multiple appraisers will be hired, each with their own specialty, to provide their independent, professional opinion on the value of the assets. One asset of interest that was relatively easy to value: a collection of 67 gold bars.
An inventory is a necessary step for administering anyone’s trust or estate after death. It would be difficult to distribute the assets without knowing what assets exist. However, the inventory does not always have to be public. For some, the idea of a public record of all assets is quite troubling. Realistically, if you aren’t a celebrity or well-known in the community, there is a good chance no one will bother to pull the inventory from your estate. However, if it is a concern for you, various estate planning methods may ease those concerns, such as use of a revocable trust, A revocable trust (also known as a living trust) is created during your life to own your assets. You control the trust and can revise the terms at any time. Upon your death, a successor trustee takes over and distributes the assets as set forth in the trust. If the revocable trust is properly drafted and funded, you can avoid a formal probate process with the courts. An inventory would still be created, but would not need to be filed with the court.