Yesterday, Today, & FOREVER The King of Pop

Michael Jackson’s Other Legacy: A Savvy Estate Plan


Kiplinger’s Personal Finance

Michael Jackson did the most sensible thing before his death: He set up a smart estate plan.

Mr. Jackson’s will provides for the care of his loved ones. A separate
document gathers his assets — said to be at least $500 million, into
a trust, ensuring that his
affairs stay (mostly) out of the courts and (ideally) out of the public
eye
. The arrangements set the stage for an orderly disposition of his
chaotic empire, says Todd Reinstein, an estate-planning lawyer in Los
Angeles.


Here’s what you can learn from the pop megastar:

Write a will. A no-brainer? Actually, about two-thirds of
Americans neglect to take on this basic estate-planning chore, allowing
a judge to divvy up their assets by default according to state law. Had
Mr. Jackson been similarly remiss, his property would have been split among
his three children, as dictated by California law. Instead, he divided
it the way he wanted to, reportedly leaving 40 percent of his estate to
the children; 40 percent to his mother, Katherine Jackson; and 20
percent to charity.

Mr. Jackson avoided potential misunderstandings by citing each of his
children by name
and by specifically excluding his ex-wife from any inheritance.

— Consider a living trust. Along with a will, Mr. Jackson
established a living trust.
This estate-planning tool lets you transfer
property, including cars, bank accounts and real estate, into a
separately owned entity
— in Jackson’s case, the Michael Jackson
Family Trust — while maintaining control as trustee. At your death,
control transfers to your designated co-trustee or successor trustee.

Name a guardian. Mr. Jackson created a legal framework for naming
a guardian for his children. Without that document, the state — not
Jackson — would have made the choice about who would raise the
children. Jackson selected his mother as primary guardian and Diana
Ross as backup.

Assemble a good team. Mr. Jackson named a top-notch lawyer, John
Branca, and a savvy business executive, John McClain, as co-executors
of his will and co-trustees of the family trust. Despite a challenge by
Katherine Jackson, Branca and McClain were awarded control of the
estate by a California Superior Court judge until the next court
hearing in August. By relying on experts, Mr. Jackson improved the odds
that his wishes would play out, Reinstein said.

Washington Post

Jackson will hits all the right notes

His Estate plan protects family’s privacy



Michael Jackson
approached estate planning with pinstriped conservatism.

Estate
attorneys say his seven-year-old will details a proper — and
exceedingly private — estate plan in which all of his assets are
directed to the revocable Michael Jackson Family Trust. The
beneficiaries are his three children, who will receive 40%; his mother,
who will receive 40%; and unnamed charities, which will get 20%. One
provision specifically omits ex-wife Deborah Jean Rowe Jackson from the
estate.

“What I see is a will that’s something similar to what
I’d prepare,” said estate attorney Laura Zwicker, a partner in the Los
Angeles-based law firm Greenberg Glusker Fields Claman & Machtinger
LLP, which works with many celebrities.  “By putting assets in a trust, nothing becomes subject to
public scrutiny or court supervision
.  He did a good job
protecting everything he could from public scrutiny, and that’s
something we’d recommend for all of our clients.”

Equally impressed is Josh Rubenstein, a New York-based attorney with Chicago-based Katten Muchin Rosenman LLP.

“I
thought his will was better than most,” said Mr. Rubenstein, who heads
his firm’s national trusts and estate practice and who has worked with
many celebrities. “Usually, creative artists do no planning or poor
planning.”

Mr. Rubenstein said Mr. Jackson’s will includes a
provision stating that estate taxes on property passing outside the
will are to be paid by the taker of such properties
. That was a smart
clause, according to Mr. Rubenstein, because it means that if Mr.
Jackson owned property with others as joint tenants, the property would
pass to the other parties without Mr. Jackson’s heirs’ having to pay
estate taxes.

Other property that passes outside of wills includes retirement plans and insurance policies.

“The
only real problem with Jackson’s estate plan was that he kept it all to
himself, so that not even the family knew a will existed,” Mr.
Rubenstein said. “This is a common problem among celebrities: They’re
so private that they tell no one.”

At the time
of his death, a court filing estimates the value of his estate at $500 million. “The
estate is going to continue to earn money ”said Lewis Stark, a certified public
accountant and partner at Eisner LLP in New York who handles royalties
for celebrities.

“We’ve already seen sales of his recordings
soar, and it sounds like there may be previously unreleased tracks,”
said Beth Kaufman, a partner at Washington-based law firm Caplin &
Drysdale.

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