After nearly six years of wide-ranging assessments, parties involved with Prince‘s estate have finally agreed on its value: $156.4 million, according to the Minneapolis Star-Tribune and the Associated Press.
The estate’s outgoing administrator, Comerica Bank & Trust, had valued it at $82.3 million, provoking howls of outrage from multiple parties, not least the heirs of the late artist, who died in 2016 without leaving a will. Last year the Internal Revenue Service valued it at an amount much closer to the final number, $163.2 million.
With an agreement between Comerica and the IRS and clearance from the heirs, the process of distributing Prince’s wealth could begin as soon as next month, the report says. While even the new number seems small in comparison with the sums commanded by Bruce Springsteen’s publishing and recorded-music catalogs (around $550 million, sources say) or Bob Dylan’s or David Bowie’s publishing alone (nearly $400 million and upward of $250 million, respectively), it is based on the value of Prince’s estate at the time of his death in April of 2016, well before the song-catalog gold rush that has emerged in recent years. Also, the dispute has run up tens of millions of dollars in legal fees and the filing states the heirs were eager to settle.
“It has been a long six years,” L. Londell McMillan, an attorney for three of Prince’s siblings said at hearing on Friday in Carver County District Court, reflecting the long, complicated and costly process of settling the estate, which is said to have cost tens of millions.
Six of Prince’s siblings or half siblings were determined to be the heirs; Primary Wave Music and Prince’s three oldest siblings hold ownership of the estate; the estate will be nearly evenly divided between those entities. Primary Wave bought out all or most of the interests of Prince’s three youngest siblings, one of whom has died. The three older siblings last year transferred an undisclosed portion of their stake to McMillan, a veteran entertainment attorney, and musician-producer Charles Spicer, who have represented them in estate proceedings.
The IRS and Comerica settled last spring on the real-estate assets of the estate, but the valuing assets such as the rights to Prince’s music was far more complicated and not completed until October, according to the report.
As part of the agreement, the IRS dropped a $6.4 million “accuracy-related penalty” it had levied on the estate; the Minnesota Department of Revenue dropped its accuracy penalty, as well.
According to the report, tens of millions of dollars will be taken from the estate in taxes. Slightly more than $5 million of the estate will be exempted from taxes under federal law, but thereafter the tax rate is 40%. In Minnesota, the first $3 million is tax-exempt; after that, much of Prince’s estate will likely be taxed at 16 %.
In mid-2020, Comerica sued the IRS in U.S. Tax Court, saying the agency’s calculations of the estate’s value were filled with errors, although that trial has been canceled because of the settlement.
