What is happening with Michael Jackson’s estate?

Written by Claire Thompson| Wills, Trusts, Tax & Probate Team | 05 June 2024

The legacy of Michael Jackson, the King of Pop, is a combination of musical talent, international success, and controversies. While his musical contributions continue to be celebrated, the management of his estate has been the subject of legal battles and family disputes.

Recently, a new feud has unfolded, centring on Bigi Jackson, Michael's youngest son, and his claim against his grandmother, Katherine Jackson.

What is Bigi Jackson’s claim against Katherine Jackson?

Bigi Jackson, formerly known as Blanket, has recently brought a significant claim against his grandmother, Katherine Jackson, challenging her role in the management of Michael Jackson's estate. This development has added further complexities to the challenging dynamic within the Jackson family.

Bigi's primary contention revolves around the financial decisions and overall management of the estate, which he believes have not been in the best interest of Michael Jackson's heirs. At the heart of Bigi's allegations is the assertion that Katherine Jackson, despite her advanced age and health issues, has continued to exert substantial influence over estate matters. This influence, according to Bigi, has led to decisions that may not align with the long-term financial stability and personal welfare of Michael's children.

Katherine Jackson, now 93 years old, has been a pivotal figure in the management of Michael Jackson's estate since his untimely death in 2009. Katherine has gradually stepped back due to her age and health concerns. Despite this, her involvement in key decisions and her influence within the family have persisted.

Why haven’t the beneficiaries received any money from the estate?

The beneficiaries of the estate have recently had a request that estate funds be paid to them, rejected by the executors; John Brance and John McClain. The executors have stated that this is due to the ongoing IRS audit. The IRS believe that Michael Jackson’s estate was undervalued and, as a result, are claiming $700 million of additional tax from the estate.

It is not uncommon for estates of US celebrities to face additional questions about how their assets have been valued due to the difficulty of valuing assets, such as intellectual property rights and image and likeness of the celebrity.

The same can happen in the UK. When you die, your executors will usually complete an inheritance tax form which values your assets. If HMRC have reason to believe that the values of the assets are incorrect, they can raise enquiries. If there were to do this (and the Grant had already been issued) it would be prudent for the executors not to distribute (or not to distribute the sum in question) until the disagreement with HMRC had been resolved so that the executors have the money to pay the tax. If executors in the UK do distribute estate funds and cannot recover the funds needed to pay the inheritance tax from the beneficiaries then they may have to cover the shortfall from their personal assets.

Who deals with an estate?

In the UK, an estate is usually managed by the executors named in a Will. An executor is a crucial figure in the administration of a deceased person's estate. Their role involves managing and distributing the estate in accordance with the deceased's will and applicable laws. This includes tasks such as locating the will, applying for probate, valuing the estate, paying off debts and taxes, and distributing the remaining assets to the beneficiaries.

In England, the process begins with the executor applying for a Grant of Probate from the Probate Registry. Once granted, this legal document allows the executor to access the deceased's assets and manage their distribution. Valuing the estate accurately is essential, as it determines any inheritance tax liabilities. Executors must ensure all outstanding debts and taxes are settled before distributing the assets to beneficiaries as stipulated in the will.

Why is choosing the right executor important?

Choosing the right executor is important due to the complexity and responsibility associated with the role. An executor should be trustworthy, organised, and capable of handling financial and legal matters. An executor can be a family member, friend, or a professional such as a solicitor. It is also common to appoint multiple executors to share the responsibilities, which can provide a balance of personal knowledge and professional expertise.

The right executor ensures that the estate is managed efficiently, reducing the potential for disputes among beneficiaries. An executor who is familiar with the deceased's wishes and family dynamics can handle sensitive issues with care, minimising conflict. However, a poor choice can lead to mismanagement, delays, and legal challenges, which can be costly and distressing for the beneficiaries.

Bigi Jackson's recent claim against Katherine Jackson highlights the challenges and complexities faced by the Jackson family as they continue to deal with Michael Jackson’s estate. Regardless of whether or not the claims against Katherine Jackson are found to have merit, the case demonstrates the importance of  ensuring that you choose the right executors for your estate.

If you would benefit from experienced advice about how to effectively futureproof your estate for your loved ones, our Wills, Trusts, Tax & Probate team can help. You can get in touch with the team by calling 01752 827067 or emailing wills@nash.co.uk.