Michael Jackson’s Estate Continues to Unwind

Michael Jackson’s Estate Continues to Unwind- A long-standing tax dispute between Michael Jackson’s estate and the IRS and other legal challenges have still not been resolved after more than a decade. His musical legacy is incredibly profitable, but as explained by a recent article from UPI, “$600M fight over Michael Jackson’s catalog offers estate planning lesson,” the estate battles continue. The latest installment: a California appellate court approved a sale of assets valued at $600 million proposed by Jackson’s estate in late August.

There are lessons to be learned, even if you’re not the King of Pop:

Jackson did have a will, which was signed in 2002. Nearly everything he owned was left in a trust for his children, with his mother receiving a small lifetime interest. The will gave his executors the right to sell estate assets as they think best, with proceeds to be distributed to the children. In February 2024, they negotiated to sell a large part of his catalog to a joint venture with Sony for $600 million. However, Jackson’s mother objected because, as she told the court, Michael had told family members before he died the assets should never be sold.

The court cleared the way for the sale, as a person’s expressed wishes aren’t the same as the instructions in a will, trust, contract, or deed.

In California, as in many states, a will must be in writing, signed by the person making the will—known as the “testator”—and signed by two witnesses. This reasoning is simple. People create wills to preserve reliable evidence of their intent for the estate plan.

However, when the testator’s intent is questioned, courts typically allow witnesses to testify about how the text should be interpreted. Michael’s will gave his executors broad powers to sell estate property. His mother believed he wanted to gift his music catalog to the trust.

Michael Jackson’s Estate Continues to Unwind

Executors need the ability to make decisions about buying and selling estate property during probate, so they don’t need court approval for routine transactions. The overall goal is to increase the value of the estate distributed to beneficiaries.

Estate planning attorneys often advise clients against attaching restrictions to the sale of property. It’s impossible to know how various types of property will be valued in the future. For example, Joseph Pulitzer, a media baron and founder of the Pulitzer Prize, used his will to bar executors from selling any part of his newspaper business. Twenty years after Pulitzer died, trustees had to go to court to gain permission to revise the will so heirs could sell the newspaper. The value of the newspaper had decreased significantly. However, it still had enough value to be salable.

The bottom line is that wills and trusts are enforceable parts of an estate plan. When questions are raised, courts are reluctant to make changes based on posthumous testimony from others.

An experienced estate planning attorney will ensure that your wishes are documented and enforceable in your last will and testament and your trust. Take the long view with your wishes, since restrictions that make sense when your will is created may not serve your heir’s best interests in the future.

Schedule your phone consultation: THE LAW OFFICES OF CLAUDE S. SMITH, III

Michael Jackson’s Estate Continues to Unwind

Reference: UPI (Aug. 28, 2024) “$600M fight over Michael Jackson’s catalog offers estate planning lesson”