As the court battle between Michael Jacksons heirs and entertainment company AEG heads to the jury, the case highlights five legal challenges and complications that the estate executors have had to worry about in the last few months alone.
Many people never stop to think of how hard it is to administer the estate or trust of someone who passes away. Often, it's a thankless job filled with headaches. That's certainly been the case for the Michael Jackson Estate executors: entertainment attorney John Branca and music executive John McClain. Well, at least the headache part. Here are the top five lessons to take away.
1. The AEG Wrongful Death Trial: It's a Thriller!
Now nearing the five-month mark since opening statements, the trial has been filled with twists and turns, from Lionel Richie's ex talking to the King of Pop's ghost to Jackson's childhood friendship with a mouse (as revealed by the Rolling Stone). While many in the media were quick to report how the judge recently dismissed two AEG executives from the case, a more telling ruling came down at the same time.
As reported by CNN: The judge also ruled that the Jacksons "presented substantial evidence" that AEG Live's "conduct was a substantial factor in causing" Jackson's death.
This means that it's completely up to the jury to decide if the Jackson heirs' $40 billion claim will win or not. If the jury views the evidence like the judge, and feels that there is "substantial evidence" that AEG hired Dr. Conrad Murray and helped cause Michael Jackson's death, then his children and mother could win a huge payday.
As any trial lawyer can tell you, juries are unpredictable. Often, plaintiffs have an excellent chance at winning once they get their case to the jury. The fact they've made it this far could mean big trouble for AEG. It also means complications for the estate executors. While they have, for the most part, stayed out of the fighting, more than a few eyebrows were raised when an estate consultant testified in favor of AEG and against the Jackson heirs. He claimed he did so with approval from the executors. The executors later denied they gave him permission, but it highlights how all of this testimony and publicity can only make their job harder.
For example, the lavish estimates of Jackson's earning capacity may be used against the estate in its next big court battle against the IRS.
2. The IRS Tells The Estate: Who's Bad?
Much was made of Michael Jackson's debt when he passed away -- it was recently estimated to be as much as $500 million. While Branca and McClain have taken some heat (like from Randy Jackson, below), there is no disputing that they've done a masterful job at guiding the estate through troubled waters into a series of huge paydays. Reportedly, they've brought in over $600 million during the first four years.
There's one problem that comes with that much success: the tax man. When the Michael Jackson Estate filed its estate tax return, it reportedly claimed his assets were worth only $7 million as of the day he died. The IRS has a slightly different view, estimating the total to be more than one billion dollars ... and as much as $1.5 billion, in fact. It says that the estate under-reported his assets so significantly that the estate owes a tax bill of $702 million. The estate disagrees and has sued to fight the IRS.
A large part of this dispute centers on the value of Jackson's image and likeness. The IRS claims it was worth $434 million, while the estate's tax filing placed a value of only $2,105.
Which of course, raises the question: If Michael Jackson's image and likeness, not to mention his other assets (the value of his music, for example), were worth as little as the estate's tax filing claimed, why has the estate earned so much money since he died? While the IRS appears to be overreaching with its figures -- especially placing such a high value on his image and likeness and apparently failing to include his extensive debt -- certainly, the post-death success shows that the estate was a tad too aggressive in its tax return filing after Michael Jackson died.
3. Alleged Egg Donor Goes To Court To Send Message To Jackson Kids: I Just Can't Stop Loving You.
The Michael Jackson Estate has other headaches to deal with. Like who exactly is the mother of Michael Jackson's three kids? Deborah Rowe is often referred to as the mother of Michael Jackson's oldest two children, Prince and Paris.
But a new court filing by a woman named Christine Leroux claims that she was the egg donor for all three of Michael's children, and she enjoyed a secret, lifetime relationship with the King of Pop. She says she will pursue a custody battle through a guardianship proceeding, because she is worried over the welfare of the kids.
In the filing, Leroux reportedly claims that she chose names for two of the children, she "ordered" Michael Jackson to cover their faces in public, and that she even co-wrote songs Thriller and Heal the World while at the same time helping to create his media image. While Leroux can't afford an attorney, she wants to take a DNA and lie-detector tests to "prove" the truth behind her words.
She'll likely have to come up with some pretty compelling evidence for the judge to even go so far as a DNA test -- certainly she can't be the only woman who's come forward claiming to be their "real" mother. Plus, being an egg donor is not the same as being legally recognized as a "mother." In the meantime, though, it's yet another legal claim that the estate executors have to contend with.
4. Randy Jackson Still Mad At The Executors; Wants Them To Beat It.
As crazy as Leroux's allegations sound, they don't stand alone. In fact, far from it. John Branca told 60 minutes that they've had to deal with countless ridiculous claims.
Michael Jackson's executors also have to deal with continued rumblings from Jackson's siblings, some of whom maintain that the will was fake. Recently, brother Randy Jackson called Branca and McClain -- along with their lead attorney, Howard Weitzman -- the "three stooges." He says the family is not happy with them, and points to the recent IRS dispute as the "tip of the iceberg".
After the failed "kidnapping" attempt of Katherine Jackson last year by Randy and two of his siblings (Janet and Jermaine), Randy admits that the siblings are not all getting along. But the only family member who, at this point, has legal standing to challenge the executors is Katherine Jackson. Despite some initial complaining in the months after Michael Jackson's death, Katherine has not fought Branca and McClain during the last few years. Many people believed that Randy, Janet, and Jermaine took Katherine Jackson last year in an effort to use her to challenge the executors. But no legal challenge materialized.
Perhaps Katherine and some of the other family members realize that the executors have done an exceptional job bringing in money after Michael Jackson's death. At $600 million in the first four years, that means that Jackson earned more than any living artist did during the same time period. Not bad for a couple of stooges, right?
5. The Latest Sex Abuse Claim: Was Jackson A Smooth Criminal?
And where would Michael Jackson's legal turmoil be without at least one claim of child molestation? Choreographer Wade Robson was one of the King of Pop's staunchest allies during the 2005 criminal trial against Michael Jackson -- which found him not guilty of child molestation.
A few months ago, Robson filed a claim against the estate contending that he was the victim of abuse by Jackson as a child. He points to a breakdown and years of therapy allowing him to reverse course and bring the claim, after repeatedly testifying and saying in interviews that Jackson never touched him.
Normally, a claim filed against an estate this late into the process would automatically be rejected. But California has liberal rules allowing late filings in cases of sexual abuse, as long as it is within three years after an injury from that type of abuse is discovered.
Only time will tell if Robson's claim is legitimate or not. The estate's attorney calls the claim "outrageous and pathetic," so a quiet settlement with Robson isn't likely. This battle is yet another example of how complicated the administration of Michael Jackson's estate remains -- more than four years after the King of Pop's death.
Of course, no one should feel too sorry for the executors. They earn a 10% commission on many deals they secure for the estate, including the $250 million Sony deal to release new Michael Jackson songs. So Branca and McClain are well-paid for the work. But they certainly have to work hard to earn it.
While perhaps no other estate executors and trustees have ever had more complicated legal messes to sort through, the Michael Jackson Estate still has an estate planning lesson for you and your clients and prospects. Everyone planning their estate should think carefully about who should serve in that all-important role of executor or trustee.
Many make the mistake of automatically selecting the oldest child, or the one who lives closest, rather than the person -- even if not a family member -- who is the most trustworthy and well-qualified to do the job. Administering an estate or trust is never easy -- even when there aren't Jackson-sized legal dilemmas at every turn. So remind your clients to choose carefully when planning their estates and trusts!
Danielle and Andrew Mayoras are co-authors of Trial & Heirs: Famous Fortune Fights! For the latest celebrity and high-profile cases, with tips to protect yourself, your loved ones, and your clients, click here to subscribe to The Trial & Heirs Update. You can like them on Facebook and follow them on Twitter and Google+.
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