The following article came to my attention, and I think you’ll find it interesting. Written by Russell Steinberg, it appeared on Celebrity News on 5/31/24. While Michael Jackson made a great effort to leave his affairs in good order with clear direction about his assets, that hasn’t stopped things from getting extremely complicated, with payments to his heirs being held up and family members at odds. Most of us don’t need to worry about this level of complexity, but it shows the importance of doing everything you can for your loved ones so things go smoothly after you’re gone. And, in case you’re forgotten when Mr. Jackson died, it was June of 2009 which means this has been dragging on now for 15 years this month!
“Michael Jackson’s beneficiaries will not receive funds from his trust until a legal dispute is settled between his estate and the IRS, according to a court filing obtained by People.
The dispute began when the IRS audited the estate’s federal estate tax return and claimed that the estate “undervalued its assets” and owed an additional $700 million in taxes and penalties. The estate disputed the IRS’ claim and won in court in 2021. However, the estate also filed a motion for reconsideration of the court’s value of Jackson’s music catalog. That case is still pending.
Until that case is decided, the value of Jackson’s estate cannot be determined and the IRS and estate cannot agree on the value of deduction in the federal estate tax return.
Jackson’s three kids, Prince, 27, Paris, 25, and Bigi, 22, are listed as beneficiaries to the late King of Pop’s trust, while his mother, Katherine, 94, is the sole beneficiary of a subtrust. Jackson’s trust calls for 20% of his estate ‘as valued for federal estate tax purposes’ to be given to charity and the remaining assets distributed to subtrusts. As the legal battle continues, the estate is providing for Jackson’s kids and mother through “the family allowance.”
Through all of this, Katherine and Bigi remain at odds over Katherine’s effort to use funds from the estate to cover the legal fees she incurred in a separate ongoing dispute over Jackson’s music catalog and its sale to Sony.
Katherine is arguing that the executors of the estate are not awarding enough to its beneficiaries and that they can afford to cover her legal costs.
“It seems clear to [Katherine] that the Executors are holding all of the assets in the Estate in order to keep control over them, and to avoid the more liberal distribution requirements of the Trust,” her court filing reads, according to People.
The filing also disputes the executors’ belief that 20% of the estate must be donated to charity before additional assets are distributed — one of the factors holding up distributions to Katherine and her grandchildren in the first place.
“Nothing in the Trust requires those payments to be made before any preliminary distribution to other beneficiaries,” it reads.
Regardless, Bigi is requesting the court deny the request.
“It is readily apparent that a reversal on appeal would be an extreme longshot,” Bigi’s lawyers wrote on his behalf. “Given those odds, Bigi decided not to waste his resources to participate in an appeal. Nonetheless, Katherine has decided to appeal this court’s ruling. That decision is not for the benefit of the heirs.”
Often, the big winners are the attorneys representing the various parties in these cases. While in this case it doesn’t appear anyone is in dire straits because they can’t access the funds that will eventually come to them, thinking about “regular people” – that could happen. Suppose you don’t have a proper estate plan that has been legally executed and up-to-date and is not open to interpretation. In that case, you are putting your heirs at risk. No one wants that. If it is time for you to update your plan or create one, I’d be honored to help you ensure your assets and loved ones are protected. Call me at 513-399-7526 or schedule a consultation through my website at www.davidlefton.com.
Source: Celebrity News, Russell Steinberg, 5/31/24