Wednesday, July 8, 2009

Michael Jackson Blogging

Though Michael Jackson's personal life and finances were definitely different, his business acumen was legendary, and according to, he left an estate plan that we can all learn from.

Here's what he did.

He made a will, which unfortunately most people don't do. Most people's estates will be distributed according to state law. Jackson, on the other hand, spelled out what he wanted to happen. He cited each of his children by name and specifically excluded those that he did not want to share in his estate. This makes it clear that these were considered choices, not oversights.

Along with his will, he created a revocable trust. This trust is actually a legal entity. The pour-over will dumped all of the assets into the trust, which now owns all of Michael Jackson's assets. With this move he avoided probate, which is public record, assuring some privacy for his affairs.

While he was alive, he administered the trust. He designated who he wanted to take over (act as trustees), when he was gone. He set up two independent co-trustees with specific relevant experience, a lawyer and a business manager, both of whom had long histories of working with him. Both have excellent reputations in their perspective fields. By relying on experience and expertise Jackson improved his odds that his wishes would be followed.

So far the estate plan has already survived the challenge from his mother who wanted to administer the business affairs and distribution of the estate. But the big fight is going to be custody of the children.

Jackson made it that he wanted his mother to care for the children, but it looks like the biological mother, Debbie Rowe is going to challenge that. Usually the court will give preference to a biological parent over everyone else unless they are unfit or have given up parental rights. The mother, Debbie Rowe relinquished her rights, but later petitioned to reinstate them. Who knows what's behind that story. Another issue is Michael's mother's age, which is 79. And it could get wild because there's a third surrogate mother out there who could show up for the party.

So it looks like in death Michael's personal life is mess as it was when he was alive, but his business affairs will be fine because he took the effort to get good legal advice and did some sound estate planning.

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