The Estate of Prince – Valuation is Tricky - (Part 2)



The Estate of Prince – Valuation is Tricky (Part 2)

Last week we discussed how Prince died without a Will and several problems that that is causing in the process of estate settlement.  This week we consider another aspect of Prince’s estate settlement:  the challenges of properly valuing assets in estate settlement.


At the very early stages of the estate settlement process, a person or entity will be formally named by a Probate Court to handle the affairs of a decedent.  If the decedent left no Will that role is usually termed an “Administrator.”  And one of the very first tasks of an Administrator is to figure out what the various assets of the Estate are and to determine the value of those assets as of the date of death.  For some assets, that is quite easy to do.  There are indications Prince had about $110,000 in four bank accounts and 67 10-ounce gold bars.  For a bank account, the date of death value is simply the account balance on the date of death.  The value of gold changes a bit every single day.  Yet the fair market value per ounce of gold on a given day is easily accessible in newspapers or on financial websites.


Prince also collected a great many motor vehicles and motorcycles.  For most non-celebrities, the fair market values of vehicles can easily be located in Kelley Blue Book.  There are hundreds of thousands of 2016 Toyota Camrys on the roads today, for example, and there is nothing special or unique about those cars.  Kelley Blue Book is simply a reference guide based on thousands of motor vehicle purchases that occur every year.  And car dealers and private individuals buying and selling cars all operate with NADA values in mind.  So those values are readily accepted for estate settlement purposes.


But what if you have a vehicle that is not listed in Kelley Blue Book?  How do you go about trying to value a vehicle that has rare or possibly even unique attributes?  Consider Prince’s highly customized purple 1981 Honda CM400 Hondamatic which he rode in his iconic 1984 movie “Purple Rain.”  The main problem is that this is not merely a customized motorcycle.  Rather it is a highly customized motorcycle that was owned by a celebrity.  And that motorcycle was depicted in a major Hollywood movie.  So in the entire world there may be other purple 1981 Honda CM400 Hondamatic motorcycles.  But there is only one “Purple Rain” motorcycle that was owned by Prince.


So how will “Purple Rain” get valued?  Prince’s Administrator will need to obtain what is known as a “qualified appraisal.”  In probate and tax law, a qualified appraisal is an opinion of value from someone who is personally qualified as a professional to make that appraisal.  The idea is that a layman lacks the expertise to determine the fair market value for certain hard-to-value assets.  But someone else who is properly trained or has other relevant expertise and credentials may be qualified to make that determination.  Examples of assets for which a qualified appraisal might be needed include jewelry, artwork, or other collectibles.  In fact the work done by most real estate appraisers (but not real estate agents or brokers) are qualified appraisals.  That is because real estate appraisers must have extensive training and experience in valuing real estate.  So their opinion of real estate value matters.


For the Purple Rain motorcycle, Prince’s Administrators will need to hire someone who has knowledge and expertise in the business of buying and selling motor vehicles that were owned by celebrities.  Or maybe Sotheby’s or one of the other big auction houses has personnel who specialize in auctions of those types of vehicles or similar Hollywood memorabilia.  A typical neighborhood Honda dealership will not have the sort of specialized knowledge or credentials necessary to make that valuation. 

Whenever an asset is actually sold, it is easy to take the price paid for that asset as the true value of that asset as of the time of the sale. (This presumes that it is an arm’s-length transaction without either the buyer or seller being under duress and each having all relevant knowledge regarding the transaction.)  But without an actual sale, it is mere speculation of what it might sell for.  And to probate courts and estate tax authorities, the opinion of a qualified appraiser is what is needed to properly substantiate such speculation.


The Estate of Prince has other hard to value assets as well.  When he died Prince had written a memoir that is slated to be published sometime later this year.  That memoir will likely sell more widely now that Prince has died.  So the fair market value of rights to that as-yet-unpublished memoir will need to be valued as an asset of the estate.  And estimating the value of that anticipated revenue stream will require an appraisal from someone who understands the economics of the book publishing business.

If you have any questions about the issues presented above or care to discuss any other planning issues, please call us at 860-769-6938, visit our website at or email us at


Read Part One: The Estate of Prince - A Royal Mess (Part 1)


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