Michael Jackson Estate

Music, Estates, Taxes and the IRS - Latest On Michael Jackson and Prince

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The Value of Michael Jackson's Right of Publicity

What's the value of a name? That is the question the IRS is asking in a dispute over the post-death value of Michael Jackson's name and likeness.  Under California law, where Michael Jackson resided at the time of his death in 2009, his right of publicity lasts for 70 years after his death. That means his estate can continue to make money from licensing the rights to use Michael Jackson's name, likeness, and voice.

The IRS Court will need to determine the value of Jackson's right of publicity at the date of his death.  The rub is that the family says the value was almost zero at the date of his death because Jackson was taking minimal steps to promote his name and likeness. Post-death, the family ramped up efforts to maximize revenues and did a great job promoting and licensing the name and likeness rights of Jackson. The IRS claims they are entitled to the increase in value, not just the purported value at death.  The asserted value at death was $2,105. The IRS claims the value is closer to $434 million.

The valuation does not take into account revenues from song or sound recording copyrights owned or licensed by Jackson.

Hindsight might be 20/20.  Music attorney Tamera Bennett was interviewed in 2009 on the value of the Jackson estate and stated, "Michael Jackson’s most valuable asset is his name and likeness, ie, his right of publicity. This right is descendible under California law. For estate tax purposes the value of his right of publicity is speculated to exceed the liquid assets of his estate."

Prince's Estate Tax Payment Could Have Been Reduced

Prince died in April 2016 without a will, trust, or other estate or tax planning documents in place. In a worst case scenario, Prince’s estate is subject to a federal tax of 40 percent and Minnesota’s state tax of 16 percent. In January 2017, Prince's estate had to make its first estate tax payment to the IRS. It's estimated the estate will owe $100 million in taxes.

Like the Jackson estate, the Prince estate is working to maximize revenues from the music assets. Deals were struck to have Prince's music catalog available on all major streaming services in February. Most likely a choice Prince would have personally hated based on the limited streaming deals he did during his lifetime. Additionally, Universal acquired rights to Prince's "vault" of back catalog recordings that have not been released.

Music attorney Tamera Bennett discussed the Prince estate issue with KRLD radio news manager Mitch Carr in the days following Prince's death. You can listen to the interview by clicking here.

Texas Music Lawyer Tamera Bennett Interviewed On Prince Estate Issues

Lesson Learned From Prince Make an Estate Plan attorney Tamera Bennett interviewed on KRLD. #princerip #rightofpublicity #estateplan #copyright

Dallas copyright and music attorney Tamera H. Bennett was interviewed today by KRLD Radio News Anchor Mitch Carr regarding what happens now to the assets in Prince's estate.

The death of music icon Prince shook the music world . . . but it's also causing headlines in the legal world. Prince's sister Teeka Nelson has gone to court to ask that someone be named to take over her brother's multimillion-dollar estate . . . and says there is NO WILL.

Click the arrow below to hear Mitch Carr and Tamera Bennett's conversation recorded on April 27, 2016.

Transcript of interview with Texas Music Lawyer Tamera Bennett on Prince Estate:

Mitch Carr -- The death of music icon Prince shook the music world . . . but it's also causing headlines in the legal world. Prince's sister Tyka Nelson has gone to court to ask that someone be named to take over her brother's multimillion-dollar estate . . . and says there is NO WILL.

Tamera Bennett -- So two different things were talking about.  Dying intestate means he died without a will.  

Mitch Carr -- Okay.

Tamera Bennett -- So he didn't have a written document saying this is how I wish for my assets to be disbursed upon my death.  So he dies intestate which means the state of Minnesota, just like every other state, has statutes that say who will get what upon his death.  It will go to his siblings.  And, under Minnesota law his half-siblings are treated as equal to his -- I believe he has one sister who is a full sibling.

Mitch Carr -- Right. I think what's important here is this can be a life lesson for all of us.

Tamera Bennett -- It sure can. Because we want to -- I think most of us want to control what happens to what we own whether it be small or large-- at the end of the day. And, even more than that do we really want to put our family into a position of having to figure out our wishes? And, sometimes these kind of disputes can not be fun.  So, I'm hopeful that their family will not have a lot of disputes. But, they might. We've seen it with other estates as they've passed away -- Ray Charles, James Brown.  And, in those cases they actually did do a plan.

Mitch Carr --  The fact that there can be fights either way, what does that tell us about how we should do our estate plan? How can we draw something up that won't end up in a legal battle?

Tamera Bennett --  There's nothing that's ever foolproof because it depends on the people who are left.

Mitch Carr -- Alright.

Tamera Bennett -- So, one of the recommendations we often have for people is to spell out why you're leaving them what you're leaving them. And, you don't fully disinherit people.

Mitch Carr -- The bottom line here from a legal aspect is do what you can but nothing's foolproof.

Tamera Bennett -- Exactly right and I think what's interesting partly about Prince is that there are some assets that he has that are very valuable that under Minnesota law it's going to be difficult to figure out who gets them. And one one of that is his right of publicity. So his name and likeness is obviously very valuable. In Texas we actually have a statute that says if -- pretty much -- if you're a famous person and you take value from your name or your likeness or you license that, for fifty years after your death, your heirs can benefit and control how your name and likeness is used. Minnesota doesn't have that law saying that it's inherited.

Mitch Carr -- It's unclear how much Prince's estate is worth. But during his career, he made hundreds of millions of dollars for record companies, concert venues and others . . . and he owned $27 million in property near Minneapolis.

Follow Tamera on Twitter @tamerabennett and Mitch on Twitter @mitchcarrnews.

The clip is used by permission of KRLD-CBS Dallas.

Michael Jackson Estate Inks Sony Record Deal

The Estate of Michael Jackson inked what is touted as the most lucrative record deal ever providing $250 million in advances.  The estate will continue to own Jackson's master records and license them to Sony for distribution and exploitation. The agreement does not include music publishing, merchandise, or name and likeness rights.  Sony may license the tracks for uses in video games, toys, etc.

Read more from the Wall Street Journal, The Hollywood Reporter, Rolling Stone, The New York Times.

Songwriters/Music Publishers Make Forbes Top-Earning Dead Celebrities

FORBES Magazine released their annual report on Top-Earning Celebrity Estates last week. Broadway songwriting duo Richard Rodgers & Oscar Hammerstein II placed second on Forbes'  list with $235 million in earnings.   The bulk of their $235 million in combined earnings came from the sale of The Rodgers & Hammerstein Organization and the rights to music they wrote together. See my post here about the music publishing catalog purchase.

Debuting on the list in third place is musician Michael Jackson. In the four months since his untimely death, the King of Pop's estate has brought in $90 million.  A bulk of this income is related to earnings for the much anticipated "This Is It" show.

Elvis Presley placed fourth with $55 million in earnings.   The Presley Estate topped the list in 2008 with earnings of $52 million.

John Lennon placed seventh with $15 million.

Jimi Hendrix was 12th with $8 million.

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Bennett Law Office, PC/Tamera H. Bennett The Soundtrack Album is back. Twilght, 90210, Greys Anatomy ....

'90210': It's a scene on Soundtrack 90210 (with a sneak preview from the album) | Show Tracker | Los

Source: latimesblogs.latimes.com

Remember that awesome opening scene in this season's premiere of “90210”? It was the music that made that scene for me. Iconic, retro, youthful – everything you’re supposed to feel as the gals stripped to their bathing suits and jumped...

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Bennett Law Office, PC/Tamera H. Bennett Singer Songwriter Carly Simon Sues Starbucks alleging “concealment of material facts,” “tortious interference” with contract, and “unlawful, unfair and fraudulent business practices.” All because album sales were lower than anticipated.

Instead of Retiring, Carly Simon Is Suing Her Label - NYTimes.com

Source: www.nytimes.com

Broken trust, men misbehaving, women trying to recover these sound like themes from a Carly Simon song. But this time Ms. Simon was telling a story about her most recent record.

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Bennett Law Office, PC/Tamera H. Bennett Paul Anka Gets Credit For Song Co-Written With Michael Jackson. Anka is co-writer of song and owns music publishing interest.

Paul Anka Strikes Deal With Michael Jackson’s Estate Over “This Is It” Rights : Rolling Stone : Rock

Source: www.rollingstone.com

Up to the minute breaking news from the world of music, from the editors of Rolling Stone.

Michael Jackson Exhibit at US Patent & Trademark Office

by Tamera H. Bennett On July 15  The United States Patent and Trademark Office (USPTO) and the National Inventors Hall of Fame and Museum opened a special exhibit featuring Michael Jackson’s trademark and patent applications.

The exhibit, housed at the USPTO office in Alexandria, Virginia, is open through Labor Day weekend.

More information can be found here and here.

Tamera Bennett Interviewed On "DayBreak USA": Michael Jackson Estate

Texas Music lawyer Tamera Bennett was interviewed by DayBreak USA morning show host ScottWest last week regarding the status of Michael Jackson's Estate and what will happen next. You can listen to the interview by clicking the play arrow below.

Michael Jackson Estate: Value of Right of Publicity

by Tamera H. Bennett

July 2, 2009

I vacillate between the most valuable asset in Michael Jackson's estate being his 50% interest in the Sony/ATV Tunes, LLC music publishing catalog and his right of publicity.

Estate Tax attorneys are chomping-at-the-bit about the calculation of the value of Michael Jackson's name and likeness, i.e., his right of publicity.  It is possible the actual value for estate tax purposes may exceed the liquid assets of his estate.  Under California law, an individual's right of publicity is descendible and can be transferred by a contract, will or trust.  If there is not a specific bequest in the will, then the interest may pass via a residuary clause (Cal. Civil Code Sec. 3344.1(b)).

If the Will of Michael Joseph Jackson that recently surfaced is valid, and there was no previous transfer of his right of publicity, then the interest transfers to  the Michael Jackson Family Trust executed on March 22, 2002.  If the will is not valid and the right of publicity interest passes intestate, in accordance with California Civil Code Section 3344.1(d)(2), because Michael Jackson died unmarried his interest would pass equally to his three children.

The question looms, what is the value of his right of publicity?  For estate tax purposes, the goal will be to comply with the tax laws, but keep the figure as low as possible.  For dealing with a third party that wants a license to use his name or likeness the goal is to maximize the right.

In the 1980's the value of Mr. Jackson's right of publicity had skyrocketed. Who can forget the Pepsi commercials?  Reportedly Mr. Jackson received $1.5 for the Pepsi spots.

[youtube=http://www.youtube.com/watch?v=vd15YVb2M6M]

Additionally, the song in the Pepsi commercial is a derivative of "Billie Jean."  I cannot find confirmation regarding who owns the copyright in the music in the commercial.  It is possible that Mr. Jackson was earning public performance songwriter and/or publisher  royalties each time the commercial aired.

There was an LA Gear deal that went south and various posters, stickers and molded dolls with custom outfits.

Reportedly a custom clothing line, not for dolls, was scheduled to launch in the Fall of 2009. Depending on the contract that may still occur.

The Marketing Arm's June 26, 2009 Press Release stated:

According to data from the Davie Brown Index (DBI), which uses consumer surveys to score 2,500 celebrities across various attributes, at the time of his death, Jackson's trust among U.S. consumers was significantly lower than other iconic musicians, including Elvis Presley, Elton John, and Bruce Springsteen, whose trust scores were as much as 30 points higher than that of Jackson. Data from the DBI indicates that while Jackson is known by a remarkable 99 percent of U.S. consumers, his scores for attributes such as appeal, aspiration, breakthrough, and endorsement are notably lower.

The press release goes on to say the focus moving forward should be on Mr. Jackson's career successes rather than any legal or personal issues he faced during his life.

Could the value for either estate tax purposes or for licensing purposes go down because of past allegations?  Recent examples of personal life  issues potentially lowering a celebrity's right of publicity include American Apparel's attempt to lower the value of Woody Allen's name and likeness for calculating damages in a lawsuit.  Additionally, Olympic Gold Medalist Michael Phelp's perceived value went down after an unfortunate photograph surfaced.

What there is no question about is the right of publicity exists and the family/estate/trust/whoever owns the right should strongly enforce the right and guard the nature and types of licenses issued.  "Fair Use" is a defense in right of publicity cases, but it is often very difficult to prove.  There will be a lot of unauthorized goods floating around out there.

To some it all up, if the Lego company wants to have a Michael Jackson Lego block constructed look-a-like, they are probably okay so long as there is one or a very limited quantity because they would be protected under free speech.  If they plan to mass-produce them in kits....get a license.

Surrogacy Lawyer Speaks: Michael Jackson Estate

by Tamera H. BennettPosted July 1, 2009

I asked California surrogacy lawyer Stephanie M. Caballero to provide my readers a basic understanding of the  contractual process involved in surrogacy cases and the rights of the surrogates and/or donors and how this relates to Michael Jackson and his children.

In an email reply Ms. Caballero stated:

Gestational carriers in California do not have any custodial or visitation rights to any surrogate child they give birth to because the intent to parent controls in these cases and the Intended Parents, whether they used their own genetic material or a donor egg or sperm, are the only legal and natural parents of that child.

Even if Michael Jackson used a sperm donor to father his youngest child, that sperm donor is not the parent.   Custody would have been relinquished in this case by a judgment of parentage signed by the judge and certified  by the court, allowing Michael Jackson's name to be listed as the only parent, since he was not married at the time.

For the law regarding the lack of parental rights of sperm donors, click here to review California Family Code section 7613.

Ms. Caballero has recently blogged on this topic as well here.

To learn more about the probate process and how that relates to Michael Jackson's estate click here to listen to an audio interview with California probate attorney Jennifer Sawday.

California Probate Attorney: Michael Jackson Estate Process

by Tamera H. Bennett

posted June 30, 2009

The news varies from hour to hour whether or not Michael Jackson had a will and is it valid.  Only a judge can make the decision if the will is valid and that decision will be months, even years away.

Mr. Jackson resided in Los Angeles County, California and passed away there as well.  The probate of his estate, with or without a will, is proper in the Superior Court of Los Angeles.

The link to my CREATE PROTECT BLAWGCAST here, provides insight from California probate attorney Jennifer Sawday on the process all probate cases take in California with a special emphasis on the Michael Jackson case (click here for link to initial court filing).

Our conversation explores the potential legal issues involved in settling a celebrity estate such as:

  • What is the time-line for probate in California?
  • Could some assets pass outside the probate proceeding?
  • What does probate cost?
  • What is the strategy behind Ms. Katherine Jackson filing for Letters of Administration so soon after death?
  • What happens if a "will" shows up?
  • What are the potential guardianship issues?
  • What if allegations arise that Michael Jackson is not the biological father of some or all of his children?

Look forward to your comments and questions on this topic.

Michael Jackson Had A Will In Place... Maybe

by Tamera H. Bennettposted June 29, 2009

UPDATED 2:45 pm July 1, 2009: Michael Jackson's last will and testament is circulating on the web and was allegedly filed with the Los Angeles Superior Court today.  Click here for a copy of the WillClick here for a nice summary from The Hollywood Reporter Esq. Blog.

UPDATED 12:00 pm, June 30, 2009: Click here to review the Petition for Letters of Special Administration filed on June 29, 2009 by Mrs. Katherine Jackson to serve as Temporary administrator of Michael Jackson's estate.

The Wall Street Journal reported today that the "2002 Will" may be filed with the Superior Court in Los Angeles as early as Thursday this week.

Attorney John Branca told the Hollywood Reporter today that the "Will" is to be filed in the next 48 hours.

UPDATED 3:15 pm, June 29, 2009: Yahoo and CNN are reporting Mrs. Katherine Jackson, the mother of Michael Jackson, has filed in the Los Angeles Superior Court to serve as the administrator of Jackson's Estate.  Ms. Jackson also alleges Michael Jackson died without a valid will.

Let the will contests begin.....

PRIOR POST: Billboard reported over the weekend here and here that Michael Jackson did have a written will.  Supposedly the last will and testament was executed in 2002 after the birth of his third child.  There may be codicils (amendments to the will) or a completely new will that was created later than 2002, but all of this is speculation.

As I blogged here last week, there could always be challenges to the estate planning documents such as the will or any trusts that were in place at Michael Jackson's death.

Michael Jackson's Estate: What Happens Next?

by Tamera H. Bennett posted June 26, 2009

Music fans of all ages are mourning the loss of the King of Pop.  Almost everyone I chatted with today had a story about the first time they heard "Thriller" or saw the video.  I was in high school and stayed up to midnight to see "Thriller" on the VHS station late-night video program.  We lived too far out in the sticks to have cable TV --- so no MTV.

The question that has been raised repeatedly today is what happens to Michael Jackson's estate?

I suspect Michael Jackson had a strategic estate, wealth, and asset protection plan that included layers of trusts and business entities.  I would be very surprised if any "major" assets were owned by Michael Jackson personally.

The largest asset is his 50% interest in the Sony/ATV music publishing catalog reportedly valued between $500 Million and $1 Billion dollars.  A check of the Delaware Secretary of State shows the formal business entity for the publishing company is Sony/ATV Tunes, LLC a Delaware Limited Liability Company.  I have not confirmed, but have it on a reliable source that Michael Jackson's interest in the LLC is held by a trust. [UPDATE:  The New York Times reported on June 27 this asset was held in trust]

Most likely the asset is held in a "spendthrift trust" and shielded from creditors.  In this type of trust, the beneficiary has no control over the distribution of trust income or assets and the corpus (big word for initial money/asset placed in the trust) and income is no longer in the estate of Michael Jackson and could not be attached to pay his reported $500 million debt.

If the bulk of the assets are in trust, then the public may never know the extent of his estate.  The trust documents, unless there is litigation surrounding those documents, would never become public record.  Documents would only become public record if there is a probate of a will, will contest or other legal challenge regarding distribution of his estate.

There can be a plan in place and litigation still occur.  I blogged here about the ongoing dispute among the heirs of James Brown and the challenges raised to his trust documents.

I was interviewed on this topic today by the leading music trade and hope to have a link up to that article shortly.

This link goes to a post I am continually updating on the topic of a valid will and administration of the estate.  This link goes to my interview of California Probate attorney Jennifer Sawday on the topic.

Click here to review comments from a California surrogacy attorney.  Go to JDSupra to read my additional thoughts on what happens next.