- 23rd January 2019
- Posted by: steve mills
- Category: Blog, Tax, Wills and probate
Musician, DJ and record producer, Avicii died on 20th April 2018 after reportedly taking his own life. The Swedish electronic dance artist – whose real name was Tim Bergling – was born in 1989.
Despite being just 28 years of age at the time of his death, he left behind an incredible legacy through his musical career and charitable gifts, and a sizeable estate, reportedly worth £20 million.
Avicii was best known for his popular song, Wake Me Up, which topped the music charts in 22 countries worldwide. His debut album True also reached the top ten in more than 15 countries and he received two Grammy award nominations in 2012 and 2013.
Despite his fame and fortune, Avicii did not appear to be motivated by money and was publicly known for his charitable nature. In a 2013 interview, he said: “When you have such an excess of money you don’t need, the most sensible, most human and completely obvious thing is to give to people in need.”
And Avicii did just that. He donated all of his proceeds from his 2012 tour to Feeding America, a charity fighting to combat hunger. The following year he donated one million euros to a Swedish hunger aid charity. It’s likely that Avicii gave even more money to people in need out of the media’s spotlight.
Details of Avicii’s estate have now been revealed and it highlights an important lesson for members of the public, especially those of the millennial generation. Tim Bergling had not created a Will before his untimely death, so his estate must now be distributed following Sweden’s intestacy rules. This means that Avicii’s parents will inherit all of his estate, regardless of his wishes. Due to Avicii’s charitable nature, it raises some questions. Would he have wanted to give some or all of his money to the charities closest to his heart? Would he have wanted any other family members or friends to inherit? We will never find out the answers to these questions, but it highlights how important it is to create a Will to ensure your wishes are heard.
Surprisingly, only 24% of adults under the age of 35 have a Will in comparison to 75% of adults over the age of 55. The statistics evidently prove that many millennials have not yet created a valid Will, meaning that their wishes may not be followed if they were to die intestate. This highlights the importance, regardless of age or wealth, of taking the time to create a Will to ensure assets are protected in the event of death.
In Avicii’s case, his parents will not be expected to pay a hefty tax bill as Sweden does not have an inheritance or estate tax. However, some estate tax may be due on the assets he owned in the United States of America, including his property. If he had made a Will, Avicii could have avoided any uncertainty surrounding his wishes and maximised the estate value by minimising the tax bill.
Keeping a Will is the only way to ensure you retain control of your decisions and your estate is distributed in a way that reflects your wishes.
What about taxes? Because Sweden does not have an estate or inheritance tax, Avicii’s parents will not have to pay a large tax bill, unlike if Avicii had been a United States citizen. But because he lived in California, his U.S. assets – including the Hollywood Hills home – may be subject to estate taxes. Any such taxes could have been minimized by good estate planning, especially considering Avicii’s charitable nature.
And therein lies the lesson. It doesn’t matter that Avicii was only 28 years old. No one is promised tomorrow. It’s not only “old” people that die. Anyone with assets should take the time to plan for what happens if they should die.
Estate planning often starts with a basic will, and for most twenty-somethings, that should be enough. People with greater wealth – even a small fraction of what Avicii earned – should work with an experienced estate planning attorney and create a revocable living trust, or use other more sophisticated planning measures.