Estate of Michael Jackson

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The Estate of Michael Jackson is a legal entity established following the death of American singer Michael Jackson in 2009 for the purpose of administering his property and overseeing his posthumous income. Jackson's last will was filed by the attorney John Branca at the Los Angeles County courthouse on July 1, 2009. Signed July 7, 2002, it names Branca and accountant John McClain as executors; they were confirmed as such by a Los Angeles judge on July 6, 2009. [1] All assets are given to the (pre-existing) Michael Jackson Family Trust (amended March 22, 2002), [2] the details of which have not been made public. The Associated Press reported that, in 2007, Jackson had a net worth of $236.6 million: $567.6 million in assets, which included Neverland Ranch and his 50% share of Sony/ATV Music Publishing' catalogue, and debts of $331 million. [3] The guardianship of his three children is given to his mother, Katherine, or if she is unable or unwilling, to singer Diana Ross. [4] Jackson's will allocates 20% of his fortune as well as 20% of money made after death to unspecified charities. [5]

Contents

In 2012, in an attempt to end a family dispute, Jackson's brother Jermaine retracted his signature on a public letter criticizing executors of Jackson's estate and his mother's advisers over the legitimacy of his brother's will. [6] T.J. Jackson, son of Tito Jackson, was given co-guardianship of Michael Jackson's children after false reports of Katherine Jackson going missing. [7] Media reports suggested that the settlement of Jackson's estate could last many years. [8] The value of Sony/ATV Music Publishing is estimated by Ryan Schinman, chief of Platinum Rye, to be US$1.5 billion. Shinman's estimate makes Jackson's share of Sony/ATV worth $750 million, from which Jackson would have had an annual income of $80 million. In September 2016, a deal was finalized for Sony's acquisition of Jackson's share of Sony/ATV from the Jackson estate for $750 million. [9]

In 2016, Jackson's estate earned $825 million, the highest yearly amount for a celebrity ever recorded by Forbes . In July 2018, Sony/ATV bought out the Jackson estate's 10% stake in EMI for $287.5 million. [10]

Earnings

In 2016, Forbes estimated annual gross earnings by the Jackson Estate at $825 million, the largest ever recorded for a celebrity, mostly due to the sale of the Sony/ATV catalog. [11] In 2018, the figure was $400 million. [12] It was the eighth year since his death that Jackson's annual earnings were reported to be over $100 million, thus bringing Jackson's postmortem total to $2.4 billion. [13] In 2020, Forbes recognized Jackson as the top-earning dead celebrity each year from his death to 2020 except 2012. [14] [15]

Taxation of estate

The estate administrators and the IRS estimated portions of the estate differently. [16] [17] The estate argued that its total value was $5.1 million, while the IRS initially estimated the estate's value at more than $500 million and then reduced it to $481.9 million. [18] The IRS also proposed "an additional $197 million in penalties, including a gross valuation misstatement penalty." [16] [17] A major part of the dispute related to the value of Jackson's likeness; the estate claimed a value of just over $2,000; while the IRS initially valued it at over $434 million. [17] Other disputes centered on the value of Jackson's interest in a trust that owns some songs of his and the Beatles; [17] the value of Jackson's share of the Jackson 5 master recordings rights; and the values of various stocks, bonds, and cars owned by Jackson. [17] [19]

In 2013, the estate filed a U.S. Tax Court petition claiming that the IRS overestimated the value of the estate's assets. [19] [20] In 2021, the Tax Court issued a ruling in favor of the estate, ruling that the estate's total combined value of the estate was $111.5 million and that the value of Jackson's name and likeness was $4 million (not the $61 million estimated by the IRS's outside expert witness). [18]

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References

  1. ↑ Bone, James. Jackson's mother removed as administrator of his estate, The Times, July 6, 2009.
  2. ↑ Garber, Julie. "Michael Jackson's Will vs. the Michael Jackson Family Trust", about.com, July 6, 2009.
  3. ↑ MacAskill, Ewen. Jackson's body to be put on public display at Neverland, The Guardian, July 1, 2009.
  4. ↑ "Michael Jackson's Will Cuts Out Ex-Wife Deborah Rowe", Associated Press, July 1, 2009; Nasaw, Daniel. "Jackson's ex-wife cut out of will", The Guardian, July 1, 2009.
  5. ↑ "Michael Jackson's nephew to share custody of kids". CBC News World. August 22, 2012. Retrieved May 6, 2013.
  6. ↑ "Jermaine calls for an end to Jackson family feud". BBC News. August 2, 2012. Retrieved May 31, 2015.
  7. ↑ "Michael Jackson nephew made co-guardian of children". BBC News. August 23, 2012. Retrieved May 31, 2015.
  8. ↑ Brown, David and Lewis, Leo. Michael Jackson: finances will take years to unwind, The Times, June 27, 2009.
  9. ↑ Ed Christman. , Billboard, September 30, 2016.
  10. ↑ "Sony Completes Acquisition of Michael Jackson Estate's Share of EMI Music Publishing". Billboard.
  11. ↑ Greenburg, Zack O'Malley (October 14, 2016). "Michael Jackson's Earnings: $825 Million In 2016". Forbes . Retrieved December 11, 2016.
  12. ↑ Greenburg, Zack O'Malley; Robehmed, Natalie (October 31, 2017). "The Highest-Paid Dead Celebrities of 2018". Forbes. Retrieved October 31, 2018.
  13. ↑ Greenburg, Zack O'Malley (October 30, 2019). "The Real Reason Behind Michael Jackson's Earnings Drop". Forbes. Retrieved November 28, 2019.
  14. ↑ "Michael Jackson tops list of top-earning dead celebs at $60 mn, Elvis Presley retains 2nd spot". The Economic Times . November 1, 2019. Archived from the original on January 10, 2020. Retrieved November 28, 2019.
  15. ↑ Berg, Madeline (November 13, 2020). "The Highest-Paid Dead Celebrities of 2020". Forbes. Retrieved November 30, 2020.
  16. 1 2 "IRS: Michael Jackson's estate owes $702M in taxes, penalties". United Press International (UPI). 8 February 2014. Retrieved 11 February 2014.
  17. 1 2 3 4 5 Sheets, Andy (February 2014). "Off the Beaten Tax: IRS Says Jackson's Estate Undervalued by $ 1 Billion". Tax Notes Today. 2014 TNT 28–4.
  18. 1 2 Michael Cohn, Michael Jackson estate wins smaller tax bill in court, Accounting Today (May 4, 2021).
  19. 1 2 Zajac, Andrew (20 August 2013). "Michael Jackson's Estate Challenges IRS in Tax Dispute". Bloomberg Luxury. Retrieved 11 February 2014.
  20. ↑ Sheets, Andy (2013). "Off the Beaten Tax: Sex, Death, and 'Billie Jean'". Tax Notes Today. 2013 TNT 169–6.
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