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:
- 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.
- 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.
- 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.
- 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.
- 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?