Michael Jackson Estate|Poor Estate Planning Freezes Assets

michaeljacksonMichael Jackson died a rich man. But, three years later, his children have yet to see a dime of their father’s estate. Instead, litigation has swirled around the estate, costing millions in legal and other fees.

More than three years after the death of Michael Jackson, the trust fund for his children, Prince, Paris, and Blanket, ages 15, 14, and 10, has to yet be dispersed. His estate is $600 million and Estate Street Partners (ESP) has this advice in Feb 2013 for others to avoid a Jackson-like disaster. Rocco Beatrice, Managing Director of ESP, founders of the UltraTrust irrevocable trust, explains that “because of poor estate planning Michael’s family will have to still wait years until his probate, estate taxes, creditors’ claims, and other legal battles are finalized.” Read story here.

Michael Jackson 1 billion dollar estate debate
Merely executing a will is not always sufficient to preclude issues in an estate. One should look at all options, including a trust, or perhaps an LLP. One must look at what the expectations are of the person who wishes to pass his or her estate, as well as the circumstances. Is there a business? Will the business pass to all the heirs? Who will run the business? Are there going to be issues about who runs the business? What about compensation for the one(s) who runs the business? Is there a second marriage? Will the other children feel cheated? Is there going to be in inequitable distribution of the estate? If so, will this cause issues within the family? Is there going to be an “undue influence” allegation made? Is there a basis for such a charge? All of these are legitimate questions that ought to be answered. These, and much more complex questions and issues exist in the Michael Jackson estate.

The lawyer who drafts an estate plan usually meets with clients with considerably less assets than those existing in the Jackson estate, but the issues in the Jackson estate are common to many family situations. If these kinds of questions and more are not anticipated, then there is a likelihood that at the death of the testator or testatrix, a will contest will ensue. Sadly, in such instances, the ones who benefit most are usually the lawyers.

Bottom line: Plan for every contingency you can think of, and try to anticipate the worst case scenario. Be up front and honest with your attorney.

 



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