Over the last few weeks we have seen the drama unfolding with the tragic death of Prince. Prince resided and passed away in Minnesota and with no known estate plan. This leaves his substantial estate (estimated to be between $150 and $300 million) to be probated according to Minnesota law. The court recently appointed a trust company as the administrator tasked with protecting and controlling his estate assets through the probate process. This is certain to be a lengthy and expensive legal process given Prince had multiple half and whole siblings who could be the eventual recipients of his wealth. One large creditor has already brought a claim against the estate, with more claims likely to come soon.
Without addressing the cost associated with the Minnesota probate, if Prince passed away without a Last Will and Testament in Virginia his estate would be responsible for Virginia probate taxes and executor/administrator fees. The probate tax is levied at a rate of 10 cents for every $100 of estate value at the onset of the probate process. If we took a conservative approach and said Prince’s estate was worth $150,000,000, the resulting probate tax would be $150,000. This does not include any filing fees with the court, just the probate tax itself. Estate administrator (or executor) fees are charged at the following rates based on the estate value: 5% of the first $400,000, 4% of the next $300,000, 3% of the next $300,000, and 2% of the estate up to $10,000,000. Administrator/Executor fees for estates in excess of $10,000,000 must be separately discussed with the Commissioner of Accounts. Conservative estimates could put a 1% administrator/executor fee on estate value exceeding $10,000,000. Thus, the grand total probate administrator/executor fees for Prince’s estate would be $1,621,000.