All About Estates

Assessing Drake’s Estate Planning Needs

As a Toronto native, I couldn’t help but listen to rapper Drake’s highly-anticipated new album Certified Lover Boy, which he released just a few weeks ago. In fact, it has been enjoying record-breaking streaming numbers from music fans around the world, amassing a staggering 153 million global Spotify streams in its first 24 hours of release.

Drake and his music are clearly influential on a global level. Drake’s songs have generated popular phrases such as “YOLO” and “0 to 100”, and his music videos have inspired exploitable internet memes. But, beyond the memes, what is particularly interesting is that a lot of Drake’s music—and certainly this is the case for Certified Lover Boy—is based on his own experiences, his family, his relationships and similar deeply personal themes. What this means is that much of his personal life is known by the public.

The song “Knife Talk” off of Certified Lover Boy provides a good example of this. In “Knife Talk”, Drake raps about, among other things, the wealth he has amassed despite the antagonism he has faced from others in the music industry (including, most notably, Kanye West). As I listened to this track, one verse in particular stood out to me:

I’m on everything

Jacob charged me four-fifty for a tennis chain

US Open, had it on us at the tennis game

Tell the coach don’t take me out, I like to finish games

And my pen insane, and my men insane

There’s like eighty of us now, that’s the scary thing

[Expletive] they doin’ on that other side embarrassing

We in Paris with it, hundred carats with it

All this [expletive] is for my son, ’cause he’s inheritin‘ it [Emphasis added.]

In this verse, Drake is referring to his son, Adonis Graham. While Drake tends to discuss his life in detail in his music, the existence of his son is something that he did not publicly acknowledge at first until he addressed rumours of him having a son in his 2018 album Scorpion. It is also not clear if he is living in a conjugal relationship with Adonis’ mother, Sophie Brussaux (although his most recent music implies that that is not the case).

So the question is, now that we know Drake has a son…well, Drake, is Adonis going to inherit all of your assets?

As an estate planning lawyer, I find “Knife Talk” notable because this is perhaps the first major instance of Drake discussing his own estate planning in his music.[1] And although I don’t expect Drake will be explaining his estate planning in great depth on his future releases, considering Drake’s influence on the public, I do wonder how many people have started to think about their own estate planning (or their future inheritances) as a result of this one lyric.

In addition, because of how public Drake’s life has become, including information about the assets he owns and his net worth, it is possible to identify some of the things Drake will have to think about in his own estate planning:

  • Probate Tax Planning for Ontario Real Estate: One of Drake’s most well-known assets is his luxurious Toronto home nicknamed “The Embassy”, which is worth approximately $100 million. This home, on Drake’s death, will be subject to Ontario probate tax, which is 1.5% of the value of assets subject to probate. Therefore, Drake could have a $1.5 million probate tax bill on The Embassy…unless he does the proper probate tax planning.[2]
  • Planning for International Property: Drake also owns property in locations all over the world (including, for example, California). Drake will need advice from each jurisdiction in which he owns foreign-situate property; for example, in the United States of America, there are estate taxes and gift taxes that differ from the taxes here. Drake may also want to do wills in each such jurisdiction with respect to such property, as opposed to having his executors submit his Ontario wills to foreign courts for approval (which may involve additional administrative procedures). In any event, it will be important to navigate any conflicts of laws between those jurisdictions and Ontario.
  • Shares of OVO: A significant portion of Drake’s wealth comes from his October’s Very Own (“OVO”) collection of businesses. He has launched both a record label and a clothing line under the OVO name. If any of those businesses involve Ontario or Canadian-incorporated private corporations, then they will have shares with an inherent value. As the OVO brand becomes larger and more successful, Drake may wish to engage in an estate freeze transaction to “freeze” any capital gains tax liability on his OVO shares that may arise on his death, and then pass on any future capital gains to a trust for Adonis’ benefit.[3] OVO will likely also require a management transition plan; Drake may wish to in his will direct the trustees of his estate to elect certain directors or officers of the OVO businesses, as well as provide guidance as to how he wants OVO to operate after his death.
  • Trust for Adonis: Drake has a great deal of wealth spread across a breadth of assets, and this may be a lot for Adonis to handle should he come into this wealth at a young age. Drake may wish to set up a trust for Adonis and have others (e.g. relatives, close confidants, advisors) act as trustees of the trust and help Adonis manage the wealth. He may also wish to include a protector to help ensure that the trustees of the trust are exercising their discretions appropriately. Depending on the location of Drake’s more significant assets, it may make sense for Drake to have trustees situate in such jurisdictions.
  • Contractual Obligations and Intellectual Property: Someone of Drake’s status has likely entered into hundreds of agreements, including with respect to his likeness and image as well as his intellectual property rights for his music. It is important to understand all of the obligations and entitlements Drake’s estate has under these agreements. If Drake has retained copyright in any of his music, this will be an asset that forms part of his estate that can subsequently be sold or licensed (or transferred directly to Adonis or put in the aforementioned trust).
  • Personal Items: Lastly, Drake has not been shy about his love for fancy cars, designer clothes, and everything in between. If Adonis is inheriting everything, he may not be able to make use of nor want certain luxury items. For example, Drake owns a private jet called “Air Drake”, valued at $181.5 million. That jet will require maintenance and its own crew, which will incur significant annual expenses. Thus, Drake may want to give his executors and trustees the flexibility to sell or donate certain items to increase his estate’s liquidity or obtain tax credits to reduce taxes, respectively.

These are just some of Drake’s estate planning considerations that can be glossed from what is publicly known about him. There would clearly be a lot of complexity involved in a complete plan, but of course the first step is actually having a will. Just a few years ago, Prince, who owned a home in the same neighbourhood as Drake, died without a will, and this caused family legal battles.

Drake is certainly one of the most well-known and influential Canadians of all time, and he has impacted popular culture more than most musicians. Considering the public’s interest in his family life and his ever-growing wealth, it will be interesting to see if he can inspire others to look after their own estate planning affairs.

[1] Drake does have a huge catalogue, though, so I’m not 100% certain if he has made any estate planning references in his music beforehand.

[2] For more information on probate tax planning, please see my colleague Corina Weigl’s blog post here.

[3] For more information on estate freezes, please see this informative article by PwC here.

About Demetre Vasilounis
Demetre Vasilounis is an associate in the Trusts, Wills, Estates and Charities group at Fasken. He has a broad estates and trusts practice with an emphasis on the evolving relationship between estates law and technology. Demetre has developed and implemented cohesive estate plans for clients involving a wide range of different family and corporate structures. He has also advised on probate planning, disability planning, charitable gifting, asset protection strategies, cross-border estates and tax issues, personal privacy, and family law matters. Demetre enjoys learning and writing about unique, unexplored issues in estates law, particularly with respect to digital assets, privacy, artificial intelligence and intellectual property.

2 Comments

  1. Suzanne

    September 24, 2021 - 3:21 pm
    Reply

    you’ve made estate planning considerations relatable! thank you for a well thought out write-up.

  2. Jennifer Goldsmith

    September 24, 2021 - 3:49 pm
    Reply

    As a Drake fan and an Estate Planning lawyer, I found this blog relatable and enjoyable. Thank you for this!

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.