Jackson estate entangled in tax battle
Florida residents might be surprised at the disparity between the IRS valuation of Michael Jackson’s estate at the time of his death and the valuation claimed by representatives of his estate. Because of debts, legal entanglements, and other issues, Jackson’s representatives suggest that he was worth only a little more than $2,000 at the time he died in 2009. Conversely, the IRS alleges that the celebrity’s estate exceeds $434 million in value.
The matter is slated to go to trial in 2017 in Los Angeles. Ironically, Jackson’s death led to huge earnings, including a documentary that earned more than $260 million. Additional revenues have come because of memorials, video games and a Cirque du Soleil show. However, representatives of the estate assert that these proceeds came after the star’s death, which excludes them from his estate. There is speculation that the IRS will attempt to prove that Jackson’s name and likeness held value at the time of his death, which could be a point of interest for other celebrities as they consider planning to minimize estate tax burdens for their heirs.
California laws have been passed to protect celebrities’ rights to their own images and names upon death, which could be beneficial to their heirs. However, the outcome of this court case is uncertain and could have serious implications for those who could potentially be worth more after their deaths than in life. Neither side in the Jackson case appears to know what to expect as the matter moves forward.
An individual going through the estate planning process might find that a substantial estate requires careful consideration because of estate tax implications. An experienced lawyer might be helpful in assessing options for using planning tools to maximize asset value for heirs.