Estate PlanninG

What Will Happen To Aaron Carter’s Estate?

Musician Aaron Carter, a former child pop star and younger brother of Backstreet Boys singer Nick Carter, died in November at 34.

Aaron's untimely passing is one of the more tragic celebrity deaths of 2022. It is also one of the messiest from an estate planning perspective. The late singer, who struggled with substance abuse and family discord, died unmarried and without a will, raising questions about the value of his estate, what will become of his remaining fortune, and who will provide care for his young child.

Aaron's one-year-old son stands to legally inherit everything, and other family members have reportedly said they don't plan to dispute his inheritance. But there is still the issue of who will manage his son's money until he comes of age. Because Aaron did not have an estate plan, the courts will decide this matter.

Child Stardom, Family Fueds, and Bankruptcy

Aaron Carter did not achieve the stardom of his older brother Nick, but he was a highly successful performer in his own right. He opened for the Backstreet Boys at age nine and landed a record deal shortly after. Between his music and an acting career that featured television and Broadway appearances, Aaron made over $200 million before turning eighteen, he said in 2016.

But growing up as a celebrity was challenging. Despite a decade of nearly nonstop touring and music making, Aaron learned on his 18th birthday in 2005 that he had only $2 million in his bank account and owed around $4 million in taxes. In 2013, hoping for a fresh start, he filed for bankruptcy. His net worth at the time was just over $8,000, with more than $2.2 million in liabilities.

Aaron blamed his parents for mishandling his money and leaving him in a financial hole. Under California's Coogan Law, designed to protect child performers like Aaron from unscrupulous parents, Robert and Jane Carter were responsible for setting aside 15% of the young star's money into a special trust account, known as a Blocked Coogan Trust Account, until he came of age. Similar laws have been passed in New York, Illinois, Kansas, Louisiana, Nevada, New Mexico, North Carolina, Pennsylvania, and Tennessee.

However, Aaron told Oprah Winfrey in 2016 that his parents never set aside the required funds. He also accused his mother of taking funds out of his bank account. Aaron publicly feuded with his family and was not on speaking terms with Nick at the time of his death.

Aaron also struggled with personal demons. In 2019 he revealed that he had been diagnosed with schizophrenia and bipolar disorder. A bright spot in his life was the birth of his son Prince in 2021. But at the time of his death, Aaron and ex-fiancée Melanie Martin did not have custody of Prince, allegedly due to concerns about drug use and domestic violence.

However, Melanie was granted custody of Prince in December after Aaron's death. Jane Carter told TMZ that she and Aaron's siblings still had not met Prince, but wanted to have a relationship with him and Melanie.

What Does It Mean to Die Without a Will?

Even though his attorneys had advised Aaron to make a will after the birth of his son, he didn't have one at the time of his death. Dying intestate—the legal term for having no will—means that his estate will be subject to California intestate succession law.

Because Aaron was unmarried, his entire estate will pass by law to his son Prince. Jane Carter has said that the family is on board with this and wants Prince to be taken care of financially. TMZ estimated the value of Aaron's estate at $550,000, including the Lancaster, California, home where he was found dead.

Melanie would not have necessarily received all of his money and property if they were married, unless Aaron had no other living relatives. If Aaron did not have a son, his parents would have been next in line to inherit his estate.

Unresolved Issues in Aaron Carter's Estate

While Aaron's family has indicated there will not be family inheritance drama, it is uncertain who will manage the money on Prince's behalf while he is a minor. In California, an individual can only inherit property in their name once they reach age 18.

California law provides for what is known as a guardianship of the estate to be set up when a child inherits more than $5,000, and their benefactor has not set up a trust to hold the funds. Typically, the court appoints the surviving parent to be the guardian of the child's estate.

One candidate who could look after the inheritance for Prince is Aaron's twin sister, Angel Carter. Angel filed a petition in December 2022 to become the administrator of Aaron's estate. As estate administrator, Angel would serve as Aaron's legal representative, in charge of closing his accounts, paying off his debts, and distributing assets to Prince. Another candidate to watch over Prince's inheritance is Jane Carter, but she is less likely to be chosen given the allegations that she mismanaged her own son's money. A family court found Prince's mother, Melanie, fit to take custody of Prince at a December hearing, and a court could decide that she is also fit to look after his inheritance until he turns 18. However, she will have to petition the court to become the guardian of Prince's estate. Additional family members could also submit petitions, and the court would then decide which is best to manage the inheritance for the child.

The court could order one of the following:

  • A guardianship must be created and Prince's money must be turned over to the guardian.

  • The money must be invested with the County Treasurer.

  • The money must be deposited in a blocked account or a single premium deferred annuity, with withdrawal permitted only by court order.

  • All or part of the money must be turned over to a custodian under the California Uniform Transfers to Minors Act, which allows a court-appointed custodian to manage the minor's account without a guardian or trustee until the minor turns 18.

A guardian of Prince's estate would be required to carefully manage his money and property, make smart investments, collect and inventory estate accounts and property, maintain accurate financial records, and regularly file financial accountings with the court. A court order is required to make many types of guardianship financial transactions. The guardianship can be removed and transferred when the court deems it is in the child's best interest.

Guarantee Your Final Wishes With an Estate Plan

Those close to Aaron Carter say he would have wanted Prince to have everything. Fortunately, it appears that his final wishes coincide with state law—but that is not always the case. Not having a will and other important estate planning documents can also increase the odds of family infighting over a decedent's money and property and the care of surviving minor children.

About two-thirds of Americans do not have an estate plan, leaving the fate of their money and property up to state law in the event of disability or death, and in some cases, the decision of who will care for their children will be left to the court. Even a simple will can address many of these problems.

Our estate planning attorneys can help you put your final wishes and instructions into written documents that have the force of law. We can also help with issues related to guardianship, custodianship, and other court petitions. To set up an appointment, please call or contact us. Call Santaella Legal Group, serving all of California, at (925) 831-4840, or reach out to us here.

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