Michael Jackson's Estate: Legal Implications
[Updates: 7/1 - here is a copy of Michael Jackson's will, dated July, 2002. Among other things, Jackson appointed Diana Ross guardian of his three children. 6/30 - Attorney Tamera Bennett has posted a podcast interview with California probate attorney Jennifer Sawday on the process all probate cases take in California with a special emphasis on the Michael Jackson case. Listen here.]
Legal storm clouds are gathering over Michael Jackson's estate - an unfortunate but predictable turn of events.
For starters: yesterday, Jackson's parents filed a Petition in Los Angeles Superior Court proposing that his mother, Katherine Jackson, be appointed Special Administrator to the estate and guardian to her three grandchildren. Hard to imagine their father did not in fact appoint a guardian, but at time of writing that seems a likely scenario.
Today, news reports suggest that there is in fact a will - written in 2002 - and although the family is yet to see it, Jackson's longtime lawyer John Branca has produced a copy. (See the E! Online story for more.)
And so it goes. The legal complications are about to get a whole lot more complicated.
This morning we asked two JD Supra contributors to offer their opinion re: the legal implications surrounding the Jackson estate.
Candice Aiston runs a Portland, Oregon, based boutique firm dealing exclusively with estate planning for families. As she says in her JD Supra profile, she is "a Mom who understands that when parents think about estate planning, they are not just doing it for themselves. They are doing it for their kids." To that end, we asked Candice: what can we expect to see, with regards to Jackson's three children? Her response:
What will happen to the kids depends on who comes forward and petitions for guardianship. It appears that no one other than Katherine Jackson has petitioned so far, and if it stays that way, everything may run smoothly. It may turn out, however, that parties will come forward when they realize that as guardians, they will have a great deal of control over the inheritance left behind for the kids. A legal fight over the kids is a very real possibility. The biological mother of the two older kids, Debbie Rowe, may have a legal right to custody of those kids. Any of Michael Jackson's siblings could petition as well, making an argument that Katherine Jackson is unfit to parent. Katherine Jackson is 79 years old and Michael made allegations that he was abused during childhood, so there are viable arguments that can be made that she is unfit to parent the kids.
All parents should take a lesson from this. First of all, every parent should name guardians for their kids. There's no excuse for not doing this when you can do it for free at kidsprotectionplan.com. Second, if a parent has any family members who they would not want raising their kids, they should legally document that they want to exclude these parties from being considered for guardianship. Even if the parent thinks there is no way that person would actually be awarded guardianship, the reality is that they can still submit a petition and cause the estate to incur legal fees and inconvenience the parties involved. Last, parents that have any assets should seriously consider setting up a trust, so that if something
happens to them, their children's inheritance will be a private matter controlled by a trustee of the parents' choosing, and unscrupulous parties won't have a financial incentive to petition for guardianship.
<Read more on the subject at Candice Aiston's Oregon Estate Planning Blog...>
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We asked intellectual property and entertainment attorney Tamera Bennett to talk about the legal implications surrounding Jackson's body of music. Tamera represents clients throughout Texas and Tennessee in entertainment, trademark and copyright law related matters. She works extensively with “estate” clients in reclamation of copyrights under the 1909 Copyright Act and licensing of song and master catalogs.
Tamera posted a piece to JD Supra (titled Michael Jackson's Estate: What Happens Next?) in which she said:
...I would be very surprised if any “major” assets were owned by Michael Jackson personally.
The largest asset is his 50% interest in the Sony/ATV music publishing catalog reportedly valued between $500 Million and $1 Billion dollars. A check of the Delaware Secretary of State shows the formal business entity for the publishing company is Sony/ATV Tunes, LLC a Delaware Limited Liability Company. I have not confirmed, but have it on a reliable source that Michael Jackson’s interest in the LLC is held by a trust.
Most likely the asset is held in a “spendthrift trust” and shielded from creditors. In this
type of trust, the beneficiary has no control over the distribution of trust income or assets
and the corpus (big word for initial money/asset placed in the trust) and income is no
longer in the estate of Michael Jackson and could not be attached to pay his reported
$500 million debt.
If the bulk of the assets are in trust, then the public may never know the extent of his
estate. The trust documents, unless there is litigation surrounding those documents,
would never become public record. Documents would only become public record if there
is a probate of a will, will contest or other legal challenge regarding distribution of his
estate...
Additional comments from Tamera today, by email:
There are four primary intellectual property assets that may or may not be in Michael Jackson’s estate for purposes of probate: right of publicity, music publishing copyrights of songs written by the Beatles, his own music publishing copyrights, and his artist royalties.
Michael Jackson’s most valuable asset is his name and likeness, ie, his right of publicity. This right is descendible under California law. For estate tax purposes the value of his right of publicity is speculated to exceed the liquid assets of his estate.
The asset bantered around the most in the press is Michael Jackson’s 50% interest in the Sony/ATV music publishing catalog reportedly valued between $500 Million and $1 Billion dollars. This interest is held in trust so there may be very little change in how this asset is managed after his death and it will probably not be part of the probate estate.
He also owns his own music publishing catalog, Mijac Music, estimated to be worth $50 million to $100 million. The value of his recording artist royalties from the Jackson 5 and as a solo artist is undetermined but will only increase with the number of records sold after his death.
At this stage in the game legal wrangling has already started. Ms. Katherine Jackson has claimed there is no will and has been appointed the temporary administrator of the estate by the judge in hopes that by the August 3 hearing she will be appointed the Administrator. If and when a “will” shows up, the named executor of the will, and or beneficiaries of the will, need to file an opposition to the appointment of Ms. Katherine Jackson as the administrator AND file a separate case with the court requesting the court issue Letters Testamentary and accepting the executor named in the will. Most likely all of the cases will be consolidated in the same court, before the same judge. With an anticipated challenge to the will, the judge may keep Ms. Jackson on in a temporary capacity until a decision can be made on the validity of the will.
<Read more on the subject at Tamera Bennett's Current Trends in Copyright, Trademark, & Entertainment Law blog...>
Stay tuned over the coming days as we post additional thoughts by JD Supra contributors.
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Related:
- Michael Jackson's Estate: What Happens Next?
- Petition for Letters of Special Administration: Estate of Michael Joseph Jackson aka Michael Jackson
- Michael Jackson: What Will Happen to His Kids?
- Michael Jackson's Will: Last Will of Michael Joseph Jackson
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