What if Prince has a “Love Child”? Then What?

We hear it over and over. A famous person does not have a will or trust in place. According to the news reports after his death, Prince was no exception.

This is never really a surprise to estate planners. A very low percentage of folks actually do estate planning. Could it be that we are all still partying like it is 1999?

As an iconic performer that toured the world, Prince leaves us with an interesting hypothetical. What if … Prince had a love child? What right would such a kiddo have in Prince’s substantial wealth now that he has passed?

Love Child.

First … what the heck is a “love child” anyway?

Merriam-Webster’s simple definition of love child: A child whose father and mother are not married to each other when the child of their creation is born.

The test for whether someone is an heir to a decedent’s estate without a will or trust is whether there is a blood connection between the decedent and the individual. Certainly, a love child fits that test. Knowing this, we all know the blood testing battle would certainly commence if a Prince love child does step forward.

Assuming the proof is positive…  then what? Does a Prince love child receive a share of Prince’s substantial wealth?

Here is an overview…

Named Beneficiaries.

Beneficiaries on various items still rule even if no trust or will was in place. So, if there was a beneficiary on any of Prince’s assets, those go to whomever he named to receive them.  For instance, if he named his sisters and brothers there, then they still take those assets. The main example you think of is life insurance. However, folks can place beneficiaries on real estate, investments, bank accounts and more. If that is the case, the love child would not have a piece of these assets.

Jointly held assets.

Assets held jointly with rights going to the survivor, the joint owner still takes the asset even if no trust or will was in place. So, if there was a joint owner on any of Prince’s assets, those may very well go to whomever he named as joint owner upon his death.  For instance, if he named his sisters and brothers as co-owner, then they may still take those assets. The main example one would think of is real estate. However, the joint and survivor rule also could apply to investments, bank accounts and more. If that is the case, the love child would not have a piece of these assets.

No named beneficiaries.

These are everything that is not jointly held and without a stated beneficiary. These are the assets normally distributed by the will or trust. The experts do not believe Prince had a will or trust set to distribute these non-beneficiary assets. It is also very likely that the bulk of Prince’s estate includes non-beneficiary assets.

The legal rules used for distributing assets for a decedent without a will is called “intestate succession”. Intestate succession tells us which unnamed beneficiaries are to receive these assets.

The “intestate succession” rules work in sequential order based on your degree of relation to the person who passed away. Under the rules, you stop at the first level in which living heirs are found.  You then distribute the decedent’s assets to the living heirs within that level and, if one of the heirs on that level predeceased (died before) the decedent (Prince), then you see if that predeceased person had any issue. If so, that predeceased person’s issue takes that share. For example, in Prince’s case, Prince had a brother die before he did. The predeceased brother’s issue (i.e. the brother’s kids or grandkids) would step up to take his share.

Here is a step by step look at intestate succession applied to Prince.

1. You first look next to the decedent to see if a spouse is in the picture. Current spouse?

Nope. Prince was divorced at the time of his death, so he had no spouse at the time of death. His ex-spouse might have a claim for some assets. The divorce decree might have required a life policy or some other assets in Prince’s estate to go to the ex-spouse. Beneficiaries on various items still rule even if no trust or will was in place.

2. You then look down for issue… any kids (adopted, natural … living or predeceased), or issue of those kids?

Nope.

3. You then look up for parents. Any surviving?

Nope.

4. Then you look sideways to brothers and sisters and their heirs (if one predeceases). Any here?

Yes. He has survivors here. His full sister, some half siblings and a great niece (taking a deceased brother’s share). According to the latest news reports, this group could inherit a net amount* of anywhere from 20 – 35 million dollars of non-beneficiary assets.

*We say “net amount” here because we know that Federal Estate taxes (and any Minnesota estate or inheritance taxes, if any) and costs of administration will have to be paid first. Another thing some estate planning could have reduced for Prince.

Love Child’s Rights.

Well … put simply, a Prince love child trumps all of the individuals that are lower on the list under the intestate succession rule.

Prince’s natural born child would be in the second level group under the “intestate succession” rules … considered only after a spouse. With no spouse, Prince’s child would have rights superior to the other levels after that. Prince’s Parents and Prince’s brothers and sisters (and their issue) would not be considered to have any rights to Prince’s non-beneficiary assets.

If there is one love child out there, he or she would take 100% of the net amount of the non-beneficiary assets.  Prince’s siblings and their issue would be out of luck regarding the non-beneficiary assets.  That being said, Prince’s brothers, sisters, and their heirs (along with Prince’s ex-spouse) still might be scheduled to receive other assets as a named beneficiary. If that is the case, the love child is out of luck on those assets.

Time will tell if a legitimate love child appears. If one is alive and comes forward, I think the chances are good that this young lad or lass will be singing in the purple rain.