Learn from Michael Jackson’s Estate Mistakes: Michael Jackson’s Mother Won’t Administer his Estate

The Michael Jackson Estate was back in court again earlier this week, now that his will has surfaced. I posted the will and my thoughts about it a few days ago. Previously, Michael Jackson’s mother had been temporarily granted control of his estate after she opened the probate proceeding stating she was not aware of him having a will.

Generally, it’s pretty cut and dry when there is a will. Whomever the will names as the executor (or co-executors when multiple people are named as in this case) is normally appointed by the probate court to have legal authority to make the decisions for the estate, including gathering property that belonged to the person who died, paying debts and dealing with creditors, selling assets, and distributing money to the beneficiaries.

Of course, nothing can be easy with the Michael Jackson Estate. The judge held a hearing on Monday to determine if attorney John Branca and music executive John McClain should be granted the legal authority that normally goes to those named in the will as executors. Katherine Jackson argued the duo wasn’t suitable to act, may have conflicts of interest, and that Branca had been fired by Jackson. Branca says he was rehired on June 17th, about a week before Jackson died.

The judge sided with Branca and McClain, but only in part. He appointed them on a temporary basis until August 3rd, at which time another court hearing will take place to determine if the will should be accepted as valid by the probate court. Katherine Jackson’s attorney says they are still looking to see if any other subsequent wills exist that would override the 2002 will. They also have the right to contest the 2002 will as invalid, which Katherine apparently doesn’t wish to do.

Branca and McClain were given the power to negotiate with the concert promotion company that may be owed money because Jackson died without performing the concert tour that was scheduled. The pair also can seek to stop all those who have (and will continue to) profit from Jackson’s death without permission, by selling t-shirts and other memorabilia with the King of Pop’s name and image. But, the judge also ordered that they have to keep Katherine informed of their actions. He will consider her wishes before allowing Branca and McClain to enter into any agreements that effect the Estate. The LA Times wrote about the court hearing today.

As I wrote in my prior post, Jackson tried to protect his family from probate court by creating a Family Trust. Everything that the Estate does will be for the benefit of that Trust. Because trusts (unlike wills) are private documents that the public does not have a right to see, we may never know how Jackson’s property ultimately passes. Of course, it is widely assumed that his children are the primary beneficiaries.

What all this fighting in court does tell us about the Trust is that Jackson apparently did not use it the right way. If he had properly funded that Trust — by placing all of his property, rights and other assets into it — then the trustees of that Trust would control everything, not the executors of his Estate. In other words, none of the court hearings would be necessary, and the matter would be handled in private by those he trusted to do so. Probate courts don’t have to oversee what happens with a Trust, but they do for wills and estates.

If you want to learn more about the difference between wills and trusts, here is a chart used by a division of my law firm, The Center for Elder Law.

Court documents filed in the probate court proceeding indicate the Michael Jackson estate has a value of at least $500 million. If this valuable property had been placed into the Trust during Jackson’s life — as he should have done — then it would not matter who was appointed as the Estate administrator.

I have a feeling that as this matter progresses, we’ll learn a lot more about Jackson’s property, debt, trust and estate, all because Jackson didn’t properly use his Trust. This highlights how important it is for anyone with even a modest net worth to work with a good estate planning attorney. With a properly funded trust, there is no need for families to waste time or money in probate court.

Source: Probate attorney Andrew W. Mayoras, co-founder and shareholder of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law, among other areas. You can reach him by phone at 248-641-7070 or email at awmayoras@brmmlaw.com.