(even if you aren’t Michael Jackson and £300 million in Debt)
At first glance, Michael Jackson’s three and a half page Will looks too simple to make sure his estate and assets are distributed according to his wishes. Jackson’s Will serves as a “pourover” Will, in which in Jackson’s individual name will “pour over” into the Michael Jackson Family Trust. The Will names John Branco, his lawyer, and John McClain, music representative for Interscope records, as co-executors of the estate. Barry Siegal was the third executor named, but he resigned as co-executor before Jackson died. The executors have full power and authority of the estate and are to deal with any property outside of the state of California.
Jackson’s mother, Katherine Jackson, was appointed the guardian of Jackson’s sons Michael Joseph Jackson Jr (also known as Prince) and Prince Michael Jackson II (also known as Blanket) and daughter Paris-Michael Katherine Jackson. Jackson stated in the Will that, unless he provided for in the Will or in the Trust, he intentionally omitted to provide for his heirs and his ex-wife, Deborah Jean Rowe Jackson. However, the trust still provides for his children.
The Michael Jackson Family Trust seems to have protected Jackson’s wealthy estate. The Michael Jackson Family Trust is a revocable living trust meant to benefit his mother, children and a few charities. His mother is to receive 40%, the children are to receive 40% split between the three of them and the rest is to be given to charities. The trust is set up in a way where Jackson used the trust while living, withdrawing when he would like to, and when he died, the trust would pay off any debts and bills and the rest would be distributed at the trustees’ discretion. This trust avoids probate costs because, during the trust-maker’s lifetime, the trustee of the trust owns all of the assets, not the trust-maker or beneficiary. Despite the high costs and efforts to make a revocable trust and to ensure that it is funded, the assets of the trust-maker are further protected.
The Will also includes a few requests including his Death Taxes which are to be paid by the trustees of the Michael Jackson Family Trust, and Death Taxes attributable to property outside the Will are to be charged against the taker of the property. For example, if Jackson owned property with another person as a tenant in common, the property would go to the surviving tenants who would be responsible for the taxes.
Michael Jackson’s situation is unsurprisingly unique. The star is estimated to have over USD $500 million in debt (about £300 million). Despite the excessive debt, it is estimated that the continuous growth of record sales, royalty income, and unreleased music income going into the trust will help draw in enough money to wipe out the debt and have more than enough left over for the trustees to distribute.
At Ambrose Appelbe, no matter the size of your estate, we can help you plan and protect it for you and your chosen beneficiaries. Feel free to contact Felix Appelbe or Helen Freely on 020 7242 7000 or use the Contact Request Form.
