One of the most interesting aspects about trusts is that they can provide additional instructions to the trustee. For example, a grantor may wish to pass along certain values, such as financial planning. His or her trust may further that goal by authorizing distributions to beneficiaries only for specified purposes, or perhaps limiting distributions to a monthly amount.
In the recent passing of the musical artist Prince, commentators have questioned why a public figure who was so private about his personal life did not seem to apply that value to his estate planning. In fact, not even a will has yet been found. If no estate plan is discovered, Prince’s estate may have to go through probate in a very public fashion. His assets would then be distributed to his surviving full sibling, several half-siblings and other relatives according to the laws of intestacy.
Notably, Prince is one of the few musical artists who own the copyrights to his songs. Before he obtained that ownership, he made public appearances with the word “slave” written on his face, in symbolic protect of his negotiations with his record companies. Yet for someone so concerned about having control over his own music, a very invasive outcome might be in store: his alleged vault reportedly contains hundreds of unreleased recordings and unpublished music. Transferring those items into the principal of a trust could have given a trustee the power to exercise discretion.
As this example illustrates, the importance of estate planning extends beyond the mere disposition of assets. An individual can protect his or her privacy, pass along values, and potentially minimize disputes among heirs with careful planning.
Source: USA Today, “Prince’s estate: 6 key questions answered,” Maria Puente, April 26, 2016