I previously blogged some of the estate tax issues to be faced by Michael Jackson's estate:
I also previously made available a copy of Jackson's will, which provides that all of his assets pour over to the Michael Jackson Family Trust. Although details of the trust are not publicly available, Gerry Beyer (Texas Tech) of our sister Wills, Trusts & Estates Blog reports that the trust divides the assets:
- 40% to his mother
- 40% to his children
- 20% to charity.
CNBC reports on the estate tax issues faced by the estate in Michael Jackson: Death And Taxes, by Jane Wells:
There is a mention in Jackson's will of an insurance trust for the estate, at least through 2003. ... Did Michael Jackson, in fact, have an insurance trust to cover the estate taxes? If so, was the policy large enough to cover what may be a huge tax bill? Sources tell me that is still being investigated.
If there isn't enough money to cover the taxes, [Randy Godshall of Sheppard Mullin] says it's "a virtual certainty" that the executors may be forced to sell assets, including the lucrative Sony/ATV song catalog, to pay the IRS cash. "The worst case scenario is that assets are subject to fire sale types of liquidity events, so that the hundreds of millions of dollars of potential value isn't realized," says Godshall, "which, of course, then leaves a lot less for the children." However, executors could file for an extension with the IRS, and even, perhaps, set up a payment plan over the next ten years to pay the taxes with new revenues coming into the estate. "The IRS would understand that you don't want to kill the golden goose by having to force (the catalog's) sale," Godshall says. "When Elvis died, his estate was also in dire straights, and the date of death value, I understand, wasn't all that substantial. But through good post-death management and commercial exploitation of his public image, it's a money making machine. I would anticipate we'll see the same thing with Mr. Jackson and his estate."