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However, I just received an email from a scam artist claiming he did.  I hope that everyone knows that these types of email are always false and are always scams.  Michael Jackson did not leave you money in his will, and the widow of the prince of Nigeria doesn't need your help getting $10,000,000 out of the country.  Also, in the event that someone has died and left you something, in all likelihood you will be contacted in a method other than email.

This message made it past my junk mail filter.  I'm not sure why.  Normally, I'd just delete these obvious scams and move on.  But I have to say, as an attorney who practices in the area of trusts and estates, I was very amused.  

First, the email is from "BARRISTER JOHN BRANCA [[redacted]@yahoo.com.hk]"  Let's ignore the fact that the email is from Hong Kong.  The scammer made a major error here by calling himself "Barrister."  In many countries, the job of a lawyer is split into two professions -- a barrister and a solicitor.  Generally, the barrister is the lawyer that goes to court, and the solicitor is the lawyer that does everything but go to court (it's more complicated than that).  

However, in the United States, there is no such thing as a barrister or solicitor.  All lawyers can be both or neither.  So his use of the term "Barrister" shows that he knows absolutely nothing about the United States legal system.  Not a good first step.

Here is the rest of the email in its entirety.

 

Hope you receive this message!!!

On behalf of the Trustees and Executor of the estate of Late Michael Jackson. I once again try to notify you as my earlier letter were returned undelivered. I wish to notify you that late King of Pop. Michael Jackson made you a beneficiary to his WILL. He left the sum of Five Million, Dollars (USD$5,000.000.00) to you in the Codicil and last testament to his WILL. This may sound strange and unbelievable to you, but it is real and true. Being widely entertainer, he must have been in contact with you in the past or simply you were nominated to him by one of his numerous fans abroad who wished you good. Late Michael Joseph Jackson until his death was a member "MJFC" The Michael Jackson Fan Club and the Institute of entertainer. Please if I reach you as I am hopeful, endeavor to get back to me as soon as possible to enable me conclude my job. You are advice to contact me with my personal email: [redacted]

 

Okay, I'm only pointing out some of the errors I see as a probate attorney.

1. That should be "made you a beneficiary of " his Will, not "to."
2. Not only that, as I have previously written, Michael Jackson did not leave anyone anything in his will.  The Will is a "pourover" will, meaning that it leaves everything to a Trust, and the Trust makes dispositions of the assets.  The Will is public; the trust is not.
3. The email then says, "He left the sum of Five Million, Dollars (USD$5,000.000.00) to you in the Codicil and last testament to his WILL."  This sentence does not make any sense.  It seems like the writer does not know what the term "Codicil" means, and hopes his recipient won't either.  Simply, a Codicil is an amendment to a Will.  When a person wants to change their Will, sometimes instead of rewriting the entire Will, they will issue a Codicil, which would only amend a page or a paragraph, or a section or a sentence.  Codicils were much more common in the days before computers and laser printer, when rewriting a 50 page Will could be a major undertaking.

The other errors of spelling and grammar and just general ridiculousness are easily spotted, whether or not you are an estate planning attorney.  What's sad, is that these emails actually work.  There will be some poor fool out there who will be taken in, and will soon discover that in order to receive their inheritance, they will have to pay money to the scam artist.

But note to scam artist: Stick with Princes of Africa and not Kings of Pop -- you'll be more successful. 

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Professor Beyer over at the Wills, Trusts & Estates Prof Blog links to an article in L.A. Times titled, Wrangling over Michael Jackson's Estate could revive sales of online wills.  

While it is a good thing for people who have no estate planning documents to take steps to get them done, an online will is not the right way to do it.  I'm afraid that too many people will order these online wills and then either not execute them properly, which would cause them to be invalid; or they will put improper devises in them.

If you do not have your estate planning documents done, please see an attorney.  The pain and suffering that your loved ones will encounter after your death if you have an invalid will is not worth the few hundred dollars you might save while you are alive.

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Today I am going to use the Michael Jackson case (yet again) as an example to discuss the important issue of timing when determining the value of assets included in a Decedent's estate for estate tax purposes.  As I’ve written before, the estate tax generally is imposed upon the value of a decedent’s estate at the time of his death.  Technically, according to Section 2001 of the Internal Revenue Code (the Code), “a tax is hereby imposed on the transfer of the taxable estate of every decedent who is a citizen or resident of the United Sates.”  The “taxable estate” is the “gross estate” with certain deductions and adjustments.  The key is determining the “value” of the gross estate. 

(Note to estate planning and tax professionals, I will be ignoring the alternate valuation date for now)

Under section 2031 of the Code, “the value of the gross estate of the decedent shall be determined by including to the extent provided for in this part, the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated.”  But what does “at the time of his death” mean?  Section 2033 of the Code provides that the “value of the gross estate shall include the value of all property to the extent of the interest therein of the decedent at the time of his death.”  Furthermore, the regulations provide, “the value of every item of property includible in a decedent’s gross estate. . .is the fair market value at the time of the decedent’s death.  The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.”

Does it mean at the instant of death? 

For most people and for most property, the question is moot.  The value of cash, stocks, bonds, real estate, is not going to change from the second before death to the second after death.  But for Michael Jackson, it will make a big difference.  The value of his image and his name, and his right of publicity are obviously worth a lot more after he died than beforehand.  (For more on this see the TaxProf, Michael Jackson’s Looming Estate Tax Disaster, quoting Professor Caron’s previous article on Estate Planning Implications of the Right of Publicity. 

So is valuation on this property done the second before death or the second after (or at) death? 

It seems logical that the value should be the second before death, because that what it would be worth if Michael Jackson sold the rights if he were alive.  The mere lapse of time, or the event of his death itself, shouldn’t cause an increase in the estate tax.  It wouldn’t be “fair.”  Note however, that there is some property in which, at least in part, uses a post death valuation.

For example, stocks that are traded on an exchange are valued at the mean of the highest and lowest quoted selling prices on the date of death.  In a volatile market, this could provide a substantially different value of the stock from the instant of death, especially if the decedent has a large interest in it.  If Bill Gates were to die, each 1/8 of a dollar in Microsoft’s value could result in millions of dollars of difference in the gross estate.

But the property being discussed here is not stocks or bonds.  It’s publicity rights, and the interest in the music.  As such, I believe that the correct value should be the instant before death, and not at the much higher value afterwards.

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I'm out of town for the weekend, so blogging will be light.  But I wanted to ask a quick question for people to ponder.  I've written that the estate tax applies to the value of property owned by a decedent at death.

The question I have is this.  Is it the instant before death, or the instant of death?  For Michael Jackson, it seems that the value of all of his intellectual property, that is the value of his own songs, and publishing, and likeness was worth a lot more after he died than beforehand.

This could make a huge difference in the amount of estate tax owed.  I don't have an answer yet, just the question.

Have a good weekend.

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One of the blogs on my daily reading list is the “Tax Girl” (a/k/a Kelly Phillips Erb, a Philadelphia tax attorney).  She has a regularly occurring feature on her blog called “Ask the Tax Girl” which she uses to answer readers’ tax questions (and sometimes, when necessary, gives her readers the motherly advice that they deserve ).  She recently tweeted that she had received a tax question about Michael Jackson, and I replied that I’ve been blogging about the estate tax issues involved in the case and that I would be happy to answer her reader’s question.

Sigh.  Me and my big mouth. 

Note to self: Never underestimate the sophistication and intelligence of Taxgirl’s readers.  While I was expecting a rather basic, easy to answer, yes or no question, what I got instead was:

• Are Michael Jackson’s funeral costs ordinary and necessary and are they deductible on his estate tax return?

Not necessarily the easy yes or no answer that I had hoped for, but hey, if it were an easy question, the reader wouldn’t have had to ask it.  First some background information.

• As I previously blogged, the estate tax is imposed upon the “taxable estates” of citizens or residents of the US.  Each estate is entitled to a lifetime exemption of $3,500,000, which generally means that the first $3,500,000 of assets are not subject to the tax.  I am not going to explain it again in this post, but please read my previous posts here, here, and here for more detail.
• The term “taxable estate” is defined in Internal Revenue Code Section 2051 as the “gross estate” (which is the net value of the property in the estate) minus “the deductions allowed.”  Just as an individual is entitled to deductions on their income tax return, for example, the charitable deduction and the mortgage interest deduction, an estate is also entitled to deductions that reduce the gross estate, and thus the amount of estate tax owed.
• Section 2053(a)(1) of the Code provides, in part, that one of the deductions allow is that for “funeral expenses.”

For “ordinary run-of-the-mill” estates, the estate deducts the costs of the funeral from the gross estate on the estate tax return.  But in death, as in life, there is nothing “ordinary run-of-the-mill” about Michael Jackson.  What the reader is asking is whether Michael Jackson’s estate can deduct the millions of dollars associated with not just the funeral, but with the memorial service that was held yesterday. 

Section 20.2053–2 of the Treasury Regulations provides that for an estate to take a deduction for funeral expenses, the amounts paid must actually be expended out of property subject to claims.  In other words, in order to take the deduction, the estate itself has to pay the costs. Also, those costs must be out of property that are “subject to claims,” that is property that can be used to pay creditors under local law.  So first of all, any of the costs involved that were not paid by the estate but instead was paid by the taxpayers of the state of California or the city of Las Angeles are obviously not deductible.

The regulation continues, “A reasonable expenditure for a tombstone, monument, or mausoleum, or for a burial lot, either for the decedent or his family, including a reasonable expenditure for its future care, may be deducted under this heading, provided such an expenditure is allowable by the local law. Included in funeral expenses is the cost of transportation of the person bringing the body to the place of burial.”

While there is a requirement for the costs to be “reasonable” that determination is made on a case by case basis.  Reasonable for you and me is not necessarily reasonable for someone with a few hundred million dollars.  So will the costs be deductible?  Like many other tax questions, and many other questions about Michael Jackson, the answer is going to be — it depends. 

Here is my take:

1. Everything involved with the funeral (not the public memorial but the private funeral) itself, no matter how extravagant or expensive will be allowed as a deduction.
2. Everything involved with purchasing and maintaining the burial site itself should also be deductible, even if they build a monument to him.  In a 1927 case a $21,000 mausoleum was deemed reasonable.  That’s over $250,000 in today’s dollars.
3. The costs of transporting Michael Jackson’s body from the hospital, to the funeral home, to the memorial, to wherever his final resting place may be will probably also be deductible.  This includes any costs that the estate reimburses any local jurisdiction for police escort, shutting down city streets, extra security, etc.  Even though the public memorial location is not technically included, I think it would be allowed. 
4. Any other costs paid for by the estate for the public memorial which was not part of the funeral should not be allowed as a deduction.  The public memorial, while touching, was not really part of the funeral, and the IRS would have a strong argument if they chose to disallow the deduction.  However, that being said, I wouldn’t be surprised if the estate took the deduction, and the IRS allowed it.  The larger estate tax battle is going to be over the valuation of Michael Jackson’s intangible intellectual property and the actual size of his liabilities.

Phew.  Thanks for letting me assist, Taxgirl.  I think.

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I was interviewed last week by Kiplinger Magazine regarding some of the legal issues involving the Michael Jackson estate.  The article has been published and is here. 

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As I have previously written, the estate tax is imposed upon taxable estates of more than $3,500,000.  Any amount over $3,500,000 is currently taxed at the rate of 45%.  As an estate planning attorney, my clients generally fall into one of three categories:

1. People whose assets are far below the lifetime exemption
2. People whose assets are somewhere between slightly below and slightly above the lifetime exemption
3. People whose assets are considerably above the lifetime exemption.

For clients in the first category, which these days is the vast majority of my clients, there is very little “tax” planning.  Estate planning consists of lifetime incapacity planning, and determining the best way to transfer assets to heirs while protecting those assets from potential creditors and maintaining some level of control, if so desired.  For clients in the second category, most of the tax planning involves structuring the client's assets so that the estate tax does not apply to them.  One strategy would involve a husband and wife dividing their assets between them, so that neither one owns assets above the lifetime exemption.

However, there are certain clients whose wealth is so far above the lifetime exemption, that no amount of planning is going to make the estate tax not apply.  For them, their estate is going to owe a tax on 45% of their taxable estate.  The question then becomes, what is the fair market value of the property in the estate?  For money, stocks, and bonds the answer is easy.  For other intangible property, the question is a lot more difficult.  There are techniques that estate planning attorneys use both when a client is alive and after the client has died to set the value of specific assets.  I will discuss some of these methods in future posts, probably in regards to the Michael Jackson estate.

Know for now that with regards to the estate tax, “The fair market value is the price at which the property would change hands between a hypothetical willing buyer and a hypothetical willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” 

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In my last couple of posts I explained that if Michael Jackson left assets to his mother Katherine in trust, a trust with certain specific rules, then upon Katherine’s death, those assets would not be subject to the estate tax a second time.  If Jackson engaged in proper estate planning, then he could accomplish his goal of taking care of his mother for the rest of her life, without losing millions of dollars to the government upon her death.

This is something that could, and should, be done by almost everyone, and not just the super wealthy.  Most people do not have to worry about the estate tax because their assets are far below the minimum threshold of the lifetime exemption.  Even so, there are a number of important non-tax reasons why people should leave their assets in trust — these involve protection and control.

I know I am starting to sound like a broken record, but everything I write here is pure speculation.  The Michael Jackson Family Trust has not been released.  However, if a client told me that they wanted to take care of their mother if they should die first this would be one of the methods that I would suggest.

CONTROL.  As I’ve written previously, I am sure that Jackson wanted to be able to support and provide for his elderly mother in the event that he died before she did, and left a sizeable amount of his assets for that purpose.  However, what he did not want was to give his mother the ability to determine what happens to those assets after she died. If Michael left the 40% (or any percent) of his estate to his mother outright, then upon her death, there would be nothing preventing her from leaving those assets to LaToya, Reebee, Tito, or her husband Joe, who Michael has accused on more than one occasion of beating him.  But by leaving the assets to her in trust, then Michael Jackson retains control from the grave over the disposition of the assets.  This is how it might work:

The assets are held for Katherine Jackson’s benefit in a trust. An independent trustee, probably John Branca, John McClain, or Barry Siegel, controls the distribution of assets to Katherine Jackson.  They will most likely be very liberal with this decision, giving her anything she needs to continue a lavish lifestyle.  However, there is no reason to give her more than her expenses.  In fact, they might just pay her bills directly.  When she dies, the remaining trust principal will be distributed pursuant to the Trust’s terms.  Most likely, it will go to Michael’s children, or to be more accurate, will be added to the trusts established for them.

ASSET PROTECTION.  The second non-tax reason why the property should be transferred in Trust and not outright is for asset protection purposes.  I want to be careful and point out that I am a Florida attorney and not a California attorney.  The laws regarding asset protection are generally state law based (with some federal bankruptcy law mixed in too).  But the basic premise is that if the assets are owned by the Trust, and if someone sues Katherine Jackson personally, then the person suing her can not collect against the trust’s assets.  There is no minimum or maximum that can be placed in trust.

A well planned estate is not just about avoiding taxes, and is not just for multimillionaires.  Through proper estate planning anyone can have the peace of mind that after their death their assets will go to benefit the people they want, and be protected from their beneficiaries’ creditors.

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In my previous post, I wrote that contrary to media reports, that it was highly likely, if not impossible that the Michael Jackson Family Trust (which has not yet been released) distributed his assets to his mother and his children outright.  (Various sites are reporting that the mother “gets” 40%, the three children receive 40% between them and that various charities will receive 20%).  I showed that his estate has to pay an estate tax of 45%, and if a distribution was made outright to his 79 year old mother of 40% of his assets (which could possibly be over $100 million) then when she dies, there would be another tax of 45% on the value of her estate.

Again, as the Trust has not yet been released, everything I write is pure speculation.

Most people don’t expect to die before their parents, and I can assume that when drafting his Will and Trust, Michael Jackson felt the same way.  However, he loved his mother and wanted to take care of her for the rest of her life should he pre-decease her. But giving her the money outright would be a tax disaster (and a bad idea for other reasons that I will discuss in later posts).  The solution?  Leave the property to her in a trust with certain rules.

Without going into too many technical details, when a person dies their estate is subject to tax on property they own, and ownership is largely determined by control.  If Katherine Jackson is distributed the property directly, she certainly controls it.  Also, if it is distributed to her in a trust in which she is the sole trustee and has unfettered access to the principal, she is in control.

However, if the property is distributed to a trust in which an Independent Trustee is responsible for determining when, and for what purposes, the trust assets are distributed to her, then upon her death, the property in the Trust will not be subject to the estate tax a second time.  In fact, Katherine Jackson can even be the Trustee herself and make distribution decisions, if the reasons for the distributions are limited to what are known as certain “ascertainable standards.” This means that a trust could be created in which she has the power to withdraw property for her health, education, support, and maintenance.  Upon her death, the property in the trust would not be subject to the estate tax, however, anything that she withdrew from the trust and still owned would be.

By engaging in proper estate planning, Michael Jackson could take care of his mother so that she lives not just comfortably, but in absolute luxury for the rest of her life, and then upon her death, those assets would not be subject to the estate tax a second time.

In a future post I’ll discuss the non-tax reasons why this type of planning is a good idea for everyone, even if you do not have millions of dollars.  This involves protecting the assets from your heir’s potential creditors, and controlling the ultimate disposition of them. 

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In my previous post, I speculated that the published reports stating that Michael Jackson left 40% of his estate to his mother Katherine Jackson, 40% to his children and 20% to charities was not, could not be entirely accurate.  Although I have not seen it the Michael Jackson Family Trust document, I am sure of the fact that instead of having the trustee distribute his assets to his mother and his children outright, that instead, the property was kept in trust.  The three reasons I set forth were (1) the estate tax, (2) creditor protection, and (3) control.

In this post, I will discuss why anyone who has significant assets should leave their property to their relatives in trust, and the potential tax disaster that awaits them if they do not.

For the sake of simplicity, assume that Michael Jackson had a taxable estate, of two hundred million dollars ($200,000,000) and that he left half to his mother outright and half to be divided among his three children outright.  I removed the charity to make the math more simple.  Also, while there are issues legal involved when significant assets are left outright to minor children, this post is only about the estate tax aspects, so ignore that for now.

Michael Jackson Estate Tax — Al numbers are hypothetical and are used for example purposes only.

Notice that the estate is confiscatory.  If Michael Jackson’s taxable estate is $200,000,000, then the federal government will receive ninety million dollars in taxes!  The distribution to his mother and children are as follows:

Remember however, that Katherine Jackson is 79 years old.  When she dies, all of those assets will be subject to the estate tax again!  Anything she left to her husband Joe Jackson would not be subject to the estate tax because of the marital deduction.  But then when he died it there would be an estate tax.  If her taxable estate is $55,000,000, then that’s another $24,750,000 to the IRS.  However, if instead of leaving the assets to his mother directly, he left them in trust for her, a trust with specific rules, then upon her death the assets will not be subject to the estate tax.

I will explain how this is done, and what the rules are in my next post. 

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It’s not my intention to turn this blog in to a celebrity gossip site.  However, there are a number of legal issues regarding Michael Jackson’s estate that are continuously being reported on by reporters who do not fully understand (or do not care about) the nuances involved.  The latest batch of confusion involves the disposition of Jackson’s assets in the Michael Jackson Family Trust.

As I previously posted, on July 1, Jackson’s Will was filed with the Cour  along with a Petition for Probate.  His will is what is known as a “Pourover Will” because it pours over any assets that Jackson owned in his individual name and not in the name of the Michael Jackson Family Trust, into the Trust.  The Petition for Probate listed Jackson’s mother Katherine and his three minor children as primary beneficiaries, along with a number of other Jacksons (who I assume are his nieces and nephews) as secondary or contingent beneficiaries.

There is no legal requirement for a Trust to be released to the public.  In fact, one of the reasons to do a Trust, especially if you are very wealthy or a celebrity is to keep your affairs private after your death.  That being said, like everything else involved in this case, I expect a full version of the Trust to be leaked any day now.  Already the press is reporting on, as TMZ so bluntly put it, “Who Gets What”.  According to the reports, “Katherine Jackson will get 40% of the assets.  Michael's 3 kids will get another 40%. And the remaining 20% goes to several children's charities.”

This cannot be completely accurate.  While I have not yet seen the document, I am 100% positive that each of Jackson’s mother, and his children are to receive their shares in trust, with a the trustee having the power to make or not make distributions of income or principal according to certain standards.

There are a number of reasons for this, from a tax perspective, from a creditor and asset protection perspective, and from a “Control” (yes, that’s Janet, not Michael) perspective. 

Later today I’ll explain why.  (I’d do it now but I have to go to a client meeting.  Blogging is fun but doesn’t pay my mortgage).

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I have previously written in the blog about the Estate Tax, but I’d like to revisit the subject using the real life example of the Michael Jackson estate.  First, some review of the basics.

The estate tax, which is often, but inaccurately called the “death tax” by people who oppose it, is not an income tax.  It is an excise tax on the value of assets transferred by an individual at the time of their death.  This includes not just money in the bank, but all assets owned by the individual, i.e. cash, stocks, bonds, real estate, Beatles songs, and Elephant Man bones.

A person dying in 2009 has a lifetime exemption, that is the amount of assets they can transfer at death before the estate tax applies, of three million five hundred thousand dollars ($3,500,000).  After that, the rate of tax on that person’s assets is 45%.  Interwoven with the estate tax is the gift tax which is a tax based on inter vivos (which means lifetime) transfers.  However, for the sake of simplicity, I will assume that Michael Jackson did not make any taxable gifts, that is, he did not make any gifts that would affect the estate tax.

Much of the public debate over the estate tax involves the lifetime exemption.  The higher the exemption is, the fewer people there are that would be subject to the estate tax.  A decade ago, the lifetime exemption was only $600,000, so a great many people were subject to the estate tax.  As it is now, very few Americans have estates that are worth $3,500,000 (especially with the stock market and real estate crash).  A married couple that engages in proper estate planning can leave $7,000,000 to their children (or to anyone they want) tax free. 

But for the Michael Jackson’s of the world, the amount of the exemption is irrelevant.  When you have hundreds of millions of dollars in assets, it does not matter whether the lifetime exemption is $1,000,000 or $3,500,000 or even $10,000,000.  What really matters is the rate, that is what percentage of the assets will be subject to the tax.  As I wrote earlier, Michael Jackson’s estate is looking at a possible estate tax liability of 45% on his taxable estate.  And the IRS doesn’t take payments of Red Zippered suits.  Cash only please.

There are a few things that should lessen the amount of the estate tax that he owes however.  First, the tax is only imposed on the net value of his assets.  The estate can deduct from the value of the assets any liabilities that the decedent had at the time of his death.  And according to published reports, Michael Jackson had very significant liabilities.  In fact, his liabilities may be so large that his estate could be worth far less than anyone would expect.  Second, just like there is an income tax charitable deduction, there is also an estate tax charitable deduction.  Any money that Michael Jackson left to charity will be deducted from the value of his taxable estate, and thus reduce the amount of estate tax that he owes.  Third, the estate may deduct the costs involved in administering the estate, which I also suspect will be substantial.

Although news reports say that it will take years and years to sort all of this out, the estate tax is due and payable nine months after death before interest and penalties (which are substantial) start kicking in.  So whoever is in charge of the Form 706 Estate Tax Return has their work cut out for them.

In a future post I will talk about the essential question of valuation, that is how do you determine what an asset is worth.  Cash and stocks and bonds are easy to value and even real estate has comps.  But how do you value the future income stream of the Beatles catalog?  What is the likeness and image of Michael Jackson himself worth?

Tough questions.  Stay tuned.

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The “Petition for Probate” in the Michael Jackson estate, which in Florida would be called “Petition for Administration” was filed in California today, along with his will. This is a petition filed with the court, requesting that the probate of his estate be opened.  In Florida, this is generally a standard form document (although it can and should be changed under the right circumstances).  I obtained the above Petition from The Smoking Gun

I am a Florida trusts and estates attorney and not a California one.  While many of the basic concepts are the same, there can also be vast differences.  I am not sure if what I linked to above is the entire filing or not.  It appears to be incomplete.

It lists John Branca, John McClain and Barry Siegel as both Co-Executors of Michael Jackson’s estate and successor co-Trustees of the Michael Jackson Family Trust.  So that answers one question as to the identity of the Trustees.  As co-executors of the estate and co-trustees of the trust, they will be able to more easily manage the transfer of the assets not already in the trust to the trust. Not to mention that there are fees that they can be paid for serving as both co-executor and co-trustees.  While these fees are not normally that large, in an estate of this magnitude and complexity they could certainly go into the millions of dollars.

According to the submission, the primary beneficiaries (that is the people who are first in line to receive the assets from the trust) are Michael Jackson’s mother Katherine Jackson, and his children, Prince Michael Jackson Jr., Paris Michael Katherine Jackson, and Prince Michael Joseph Jackson II.  The Petition for probate only states that they are beneficiaries.  They do not state any of the terms.

A big deal has been made in the media that Michael Jackson put his mother in as a beneficiary but omitted his father.  This is silly.  Katherine and Joseph Jackson have been married for over 60  years.  Joe Jackson does not technically have a right to his wife’s inheritance.  However, in reality, they are a long time married couple who presumably share everything.  Giving to his mother is not really leaving his father out in the cold.

There are also a number of contingent beneficiaries named.  These are people who inherit of the primary beneficiaries for some reason are unable to.  Or, the primary beneficiaries may have been provided with their share in a trust.  For example, there may be a trust that provides Katherine Jackson with all of the income from the trust, plus principal for her health support and maintenance for the rest of her life.  When she dies, the contingent remainder beneficiaries may inherit what is left (probably also in trust)

Again, this is all speculation, but would be something that I would do.

The contingent remainder beneficiaries are (all people have the last name Jackson unless otherwise indicated): Levon, Elijah, Anthony, Taj, Tarylls, T.J. 

While there are probably more, that is all that The Smoking Gun published at this time.  When I obtain the remainder of the document, I will post an update.

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Here is the link to Michael Jackson’s Last Will and Testament.

The will is what’s known as a “pourover” will.  In other words, instead of the will itself disposing of all of his assets directly, it instead transfers all of his assets to the “MICHAEL JACKSON FAMILY TRUST” as amended and restated on March 22, 2002.  The terms of his revocable trust will govern the disposition of his property.  I assume that most of the assets will remain in trust for his children and their children, with significant distributions to other family members and charities.

However, I don’t know.  I’m only assuming.

A will is public and is filed with the court.  A trust is not.  There is no obligation to disclose the terms of the trust to the public.  Certain beneficiaries are entitled to copies of the trust however, and it’s possible that one of them might leak it at some later point in time.

The executors of the will (which in Florida would be called personal representatives) are John Branca, John McClain, and Barry Siegel.  Their primary responsibility will be to transfer the estate’s assets, that is the assets that were not already owned by the trust, to the trust.  The successor trustee (whoever that might be) is then responsible for managing the trust estate.

He did nominate his mother, Katherine Jackson as the guardians of his minor children.  In the event of the death, inability, or refusal to act of Katherine Jackson, he nominates, believe it or not, Diana Ross!

Those are the only details now.  It’s a short five page will.  Unless there is a subsequent will, or the trust somehow becomes public, this is all the information that will be public.

I’m actually impressed.  It seems that as irresponsible of a person as he was, he might have actually done this correctly.  CF Anna Nicole Smith.

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I'll write more on this myself as it develops, but here are some articles to check out:

Smart Money: Michael Jackson's Death and Your Estate Plan

Reuters: Hello Goodbye: Jackson's Beatles rights at risk

Wall Street Journal: Getting Personal: Jackson Estate a Tangled Affair

Business Week: Settling Michael Jackson's Estate may be a Thriller.

At this point, all anyone is doing is speculating.  No one knows if he had a will or where it is.  At least no one who is talking.  There is a "rumor" going round the internet that "Michael Jackson willed his control of the Beatles songs to Paul McCartney."  That is almost certainly not true.

First, unless MJ specifically said this somewhere, how would anyone know it?

Second, the asset is highly leveraged with many secured creditors.

Finally, it's probably the most valuable thing that he owns.  Why would he do that to his children?

This is going to be fascinating from an estate planning and tax and administration perspective.  And I haven't even talked about what happens to his children yet.

Stay tuned.

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