1. Money
Julie Garber

Breaking Michael Jackson News - Copy of Michael Jackson Family Trust Publicly Revealed for First Time

By June 1, 2010

Follow me on:

Somehow, some way, the U.K. website newsoftheworld.co.uk obtained an actual copy of the Michael Jackson Family Trust and posted it online for the whole world to read. Unfortunately their U.S. editor, James Desborough, needs a lesson in estate planning terminology because he incorrectly identifies the posted document as "Michael Jackson's Will" at the top of each and every page and also in the title to his article - Michael Jackson leaves his kids more than $33 million each in will - more on the estimated value of the children's inheritance below. Mr. Desborough please take note - the document posted on your website is in fact a revocable living trust, not a last will and testament.

Nonetheless, a thorough review of the 21-page trust agreement posted on the website reveals the following:

  1. Michael Jackson signed his original revocable living trust agreement, which he named the Michael Jackson Family Trust, in November 1995. Regardless, the governing trust agreement that existed at the time of Jackson's death back in June 2009 was a fully amended and restated version signed by him in March 2002.

  2. The first 20% of Jackson's estate is to be left to one or more children's charities selected by a committee consisting of Jackson's mother, Katherine Jackson, and the current acting Co-Trustees of the trust, John Branca and John McClain. The committee can choose among existing charities or establish one or more charities in order to satisfy this bequest.

  3. The balance of the trust remaining after the payment of estate taxes, medical bills, funeral expenses, attorney's fees, and other costs incurred in settling Jackson's estate is to be distributed 50% equally among Jackson's three children, Michael Joseph "Prince" Jackson, Jr., Paris Katherine Michael Jackson, and Prince Michael "Blanket" Jackson II, and the remaining 50% to Katherine Jackson.

  4. Katherine Jackson's 50% share is to be held in a lifetime trust for her benefit with Branca and McClain serving as Co-Trustees. The Co-Trustees have the complete discretion as to when income and principal may be distributed to provide for Katherine's "care, support, maintenance, comfort and well being." Upon Katherine's death the balance of her trust is to be divided equally among Prince, Paris and Blanket.

  5. The children's shares will be held in separate trusts with Branca and McClain serving as Co-Trustees. Until each child reaches 21, distributions are left in the complete discretion of the Co-Trustees. At 21, each child will receive all of the net income from his/her own trust and principal if the Co-Trustees determine that the net income is not sufficient to provide for the child's "reasonable care, support, maintenance and education." Each child will receive 1/3 of the remaining trust principal outright at 30, another 1/2 outright at 35, and the remaining balance outright at 40. Nonetheless, the Co-Trustees are given discretion to accelerate principal distributions if a child is in need of funds to buy a home, start a family, or start a business.

Some things of note:

  • If Michael Jackson was not survived by his mother or any descendants, then after the 20% carved out for children's charities the balance was to be divided equally among three of Jackson's cousins - Levon Jackson, Elijah Jackson and Anthony Jackson - and three of his nephews (the children of Tito) - Taj Jackson, Taryll Jackson and T.J. Jackson. These shares were to be held in separate trusts in the same manner as provided for Jackson's descendants.

  • Accountant Barry Siegel was named as a third Co-Trustee along with Branca and McClain, but in a letter dated August 26, 2003, Siegel declined to serve as such.

  • If Branca, McClain and Siegel were all not available to serve as Trustees, then NationsBank, now known as Bank of America, was named to serve as the successor Trustee. Since Branca and McClain were available to serve and are in fact serving, they have the power to name one or more individuals to serve as their successors, thereby eliminating Bank of America's right to serve as the successor Trustee.

  • James Desborough also needs a lesson in reading wills and trusts because contrary to what he reported, Michael Jackson did make provisions for the payment of funeral expenses - this is always a standard provision contained in wills and trusts and can be found in the Michael Jackson Family Trust on page 3. Aside from this, with regard to the amount that Jackson's children and mother will inherit in trust, Desborough's estimate of $33 million for each child and $99 million for Katherine Jackson is just pure speculation. There will be many factors to consider, including the amount set aside for the children's charities, and bills to be paid, including a federal estate tax bill to the IRS, before the Co-Executors/Co-Trustees can even consider funding the beneficiaries' trusts.

Read a complete summary that I have prepared of the contents of the Michael Jackson Family Trust: What Does the Michael Jackson Family Trust Say?

Comments
June 2, 2010 at 10:52 pm
(1) SoCalGal says:

Why are you convinced that the document published by News of the World, a British tabloid, is the actual and bona fide Michael Jackson Revocably Family Trust?

June 6, 2010 at 7:28 pm
(2) Julie Ann Garber, Esq. says:

Good question! Mainly because at this point no one has come out publicly to dispute that the document is not the real thing and it follows the distribution pattern that was leaked to the press shortly after Michael Jackson died last year.

Sincerely yours,

Julie Ann Garber, Esq.
Your Guide to Wills & Estate Planning
http://wills.about.com
wills.guide@about.com

The information contained in this comment is not legal or tax advice and is not a substitute for legal or tax advice. For legal or tax advice, please consult with an attorney or an accountant.

June 9, 2010 at 8:16 am
(3) fellowswimmer says:

Thank you for this summary in lay terms. I get your point that no one has disputed that the document is not real, but could you explain what you mean by saying it follows the distribution pattern from last year?

June 9, 2010 at 9:30 pm
(4) Julie Ann Garber, Esq. says:

Hello fellowswimmer, with regard to my statement that the document released by newsoftheworld.com follows the distribution pattern from last year, I am simply referring to the fact that various news outlets reported the very same distribution pattern as specified in the document released by newsoftheworld.com (20% to charity, 40% to Katherine Jackson, 40% to Jackson’s children) soon after Michael Jackson’s death last year.

Sincerely yours,

Julie Ann Garber, Esq.
Your Guide to Wills & Estate Planning
http://wills.about.com
wills.guide@about.com

The information contained in this comment is not legal or tax advice and is not a substitute for legal or tax advice. For legal or tax advice, please consult with an attorney or an accountant.

October 12, 2010 at 3:29 am
(5) Brigha UK says:

Thank you for your summary. My questions are concerned with the appointment of the executors/ trustees. Michael Jacksons mother has objected to John Branca’s appointment. In what circumstances could he be replaced/removed?
Firstly, Article 9; Section 2 of the Trust states “Any corporate trustee may be removed by a majority in interest of the adult competent beneficiaries…” I had assumed this meant that once the eldest son achieves the age of 21, he and MJ’s mother can remove Branca, and if Katherine Jackson should die before then, the son would have to wait until his sister reaches 21 before any action can be taken. Is this correct?
Secondly, you said “Since Branca and McClain were available to serve and are in fact serving, they have the power to name one or more individuals to serve as their successors”. Does this mean that, if Katherine and the son choose to remove Branca in the future, that Branca can name his own successor?
Finally, since John Branca drafted this will, had physical possession of the will, currently administers the estate and benefits greatly from the estate, it seems there is no separation of power and that the situation could be open to corruption. Can you tell what checks (if any) are in place to ensure Branca does not abuse his power?

Leave a Comment

Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>

©2014 About.com. All rights reserved.