When Michael Jackson died in 2009, he left behind an advanced legacy. But one thing stays true: The King of Pop's music still generates thousands and thousands of dollars yearly. Jackson biopic is predicted for 2025, and “MJ,” his Broadway show, has brought his music to theaters worldwide.
But despite the continued success of Jackson's music, his estate has been in limbo for greater than a decade. This is as a consequence of a long-term tax dispute concerning greater than 700 million US dollars allegedly owed to the IRS, and other legal challenges.
The latest development within the saga got here on August 21, 2024, when a California appeals court approved a $600 million sale of assets proposed by Jackson's estate.
As Law Professors We are lecturers on trust and estate matters and imagine that Michael Jackson's estate can function a lesson to anyone desirous about making a will – even in the event that they don't have the King of Pop's fortune.
The mother and the multinational corporation
When Jackson signed his will In 2002, he left almost every little thing to his children in the shape of a trust; his mother has a small share during their lifetime.
His may also contained a general provision giving his executors—the people managing his estate—the ability to sell the estate's assets “on such terms as the executors think best.” The proceeds from the sale would then be distributed to his children.
In February 2024, Jackson’s executors negotiated what the New York Times called “Blockbuster deal“ to sell a good portion of Jackson’s music catalog to a three way partnership with Sony for $600 million.
Jackson's mother, Katherine Jackson, nevertheless, objected, amongst other things because, because the court explained, “Michael had told family members before his death that the assets should never be sold.
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But in mid-August, a California appeals court dismissed Katherine Jackson’s lawsuit in a final decision which approved the planned sale.
Legal requirements for a sound will
Although it is not uncommon for people to casually discuss their estate planning with family and friends, these wishes are usually not legally enforceable unless they’re captured in a sound will, trust, deed or contract.
In most states including California In Jackson's case, a will normally needed to be in writing and signed by the creator – referred to as the “testator” – and two witnesses who observed the testator signing the desire.
These requirements allow courts to differentiate early drafts and memos from the ultimate version that the testator intends to put in force after his death. These rules also force testators to retain reliable evidence of their estate planning, which is helpful in Probate proceedings which occur in court after the death of the testator.
Interpretation of the desire text
When the meaning of a will is unclear, courts let witnesses testify about how the text needs to be interpreted. Katherine Jackson offered such testimony, arguing that when Michael gave his “entire estate” to his trust, he intended that the trust should receive the estate's assets largely in the identical form as they existed when Michael died.
According to Katherine, Michael wanted to provide the Trust his music catalogue, not the proceeds from the sale of his music catalogue, nor partial management rights to that catalogue.
However, the court disagreed with Katherine's interpretation because Michael's will gave his executors broad powers even through the administration of the estate. The court explained that the trust would receive distributions from the estate, however the executors “Power of attorney to sell real estate“ while managing the property.
The executor’s authority to sell estate items
In estate planning, the importance of executor's powers is commonly missed because they’re amongst essentially the most technical terms in a will. But the dispute over Jackson's estate shows that executor's powers can play a crucial role in estate administration.
Estate planning attorneys typically advise their clients to provide the executor broad powers to purchase and sell estate assets through the execution of the desire in order that the executor doesn’t must waste money and time obtaining court approvals for routine transactions.
Comprehensive powers of attorney for executors, as provided for in Jackson's will, subsequently reduce transaction costs in the long term. This increases the web value of the estate, which is ultimately distributed to the beneficiaries. Trust law protects the estate by making executors personally responsible for any abuse of power.
Estate planning for special assets
When advising clients with unique assets reminiscent of Michael Jackson's music catalog, estate planning attorneys typically advise testators against restricting the sale of invaluable property. That's because it may possibly be difficult to predict how circumstances might change in the long run.
A famous example of this misstep is the twentieth century media giant Joseph Pulitzer – the founding father of the Pulitzer Prize – left a will which prohibited his estate administrators from selling shares in his highly valued newspaper company.
Twenty years after Pulitzer's death in 1911, the newspaper business became unprofitable, so Pulitzer's trustees petitioned a New York court for permission to revise the desire, arguing that Pulitzer had did not foresee the changing fortunes of his newspaper. Court agreedand concluded that “the continuation of the publication of the newspapers … will in all probability result in a substantial impairment or destruction of a large portion of the trust assets.”
The Pulitzer case shows how limiting the ability of executors and trustees can backfire – an issue that Jackson's lawyers obviously desired to avoid.
Estate planning lessons
Estate planning is simply enforceable when it’s formalized in a document reminiscent of a will. Once formalized in writing, courts are reluctant to vary an estate plan based on posthumous testimony in regards to the testator's oral statements – even when those wishes were expressed to a parent.
Testators should subsequently fastidiously review every provision of a will, including technical terms which will require explanation by a lawyer. Testators also needs to be cautious: it could be tempting to regulate assets from the grave, but restrictions that appear desirable during life can backfire after death.
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