Estate planning lessons from the $600 million dispute over Michael Jackson's music catalog

When Michael Jackson died in 2009, he left behind a complicated legacy. But one thing remains true: The King of Pop's music generates millions of dollars every year. A Jackson biopic is expected in 2025, and “MJ,” his Broadway show, has brought his music to theaters around the world.

But despite the continued success of Jackson's music, his estate has been in limbo for more than a decade, amid a lengthy tax dispute over more than $700 million allegedly owed to the IRS and other legal wrangling.

The latest development in the saga occurred on August 21, 2024, when a California appeals court approved the sale of $600 million worth of assets proposed by Jackson's estate.

As law professors who teach trusts and estate matters, we believe that Michael Jackson's estate can serve as a lesson to anyone considering making a will – even if they don't have the King of Pop's fortune.

The mother and the multinational corporation

When Jackson signed his will in 2002, he left almost all of his assets to his children in the form of a trust; his mother will receive a small share during her lifetime.

His will also contained a general provision giving his executors—the people managing his estate—the power to sell the estate's assets “on such terms as the executors think best.” The proceeds from the sale would then be distributed to his children.

In February 2024, Jackson's estate negotiated what the New York Times described as a “blockbuster deal”: they wanted to sell a significant portion of Jackson's music catalog to a joint venture with Sony for $600 million.

However, Jackson's mother, Katherine Jackson, objected, in part because, as the court explained, “Michael had told family members before his death that the assets should never be sold.

But in mid-August, a California appeals court dismissed Katherine Jackson's lawsuit in a final ruling and approved the planned sale.

Legal requirements for a valid will

Although it is common for people to casually discuss their estate planning with family and friends, these wishes are not legally enforceable unless they are captured in a valid will, trust, deed or contract.

In most states, including California, where Jackson died, a will must generally be in writing and signed by the author – called the “testator” – and two witnesses who observed the testator signing the will.

These requirements allow courts to distinguish early drafts and memos from the final version that the testator intends to take effect after his or her death. These rules also force testators to preserve reliable evidence of their estate planning that will be useful in probate proceedings that take place in court after the testator's death.

Interpretation of the will text

When the meaning of a will is unclear, courts will let witnesses testify about how the text should be interpreted. Katherine Jackson offered such testimony, arguing that when Michael gave his “entire estate” to his trust, he intended that the trust should maintain the estate's assets largely in the same form as they existed at the time of his death.

According to Katherine, Michael wanted to give the Trust his music catalogue, not the proceeds from the sale of his music catalogue, nor partial management rights to that catalogue.

However, the court disagreed with Katherine's interpretation because Michael's will also gave his executors broad powers for the duration of the estate administration. The court explained that the trust would receive distributions from the estate, but the executors “had full authority to sell estate assets” while they administered the estate.

The executor’s authority to sell estate items

In estate planning, the importance of executor's powers is often overlooked because they are among the most technical terms in a will. But the dispute over Jackson's estate shows that executor's powers can play an important role in estate administration.

Estate planning attorneys typically advise their clients to give the executor broad powers to buy and sell estate assets during the execution of the will so that the executor does not have to waste time and money obtaining court approvals for routine transactions.

Therefore, comprehensive powers of attorney for executors, such as those Jackson provided in his will, reduce transaction costs in the long run. This increases the net value of the estate, which is ultimately distributed to the beneficiaries. Trust law protects the estate by making executors personally liable for any abuse of power.

Estate planning for special assets

When advising clients with unique assets such as Michael Jackson's music catalog, estate planning attorneys typically advise testators against restricting the sale of valuable property. That's because it can be difficult to predict how circumstances might change in the future.

A famous example of such a misstep is the will of 20th-century media giant Joseph Pulitzer – the founder of the Pulitzer Prize – which prohibited his executors from selling shares in his esteemed newspaper company.

Twenty years after Pulitzer's death in 1911, the newspaper business became unprofitable. Pulitzer's trustees petitioned a New York court for permission to revise the will, arguing that Pulitzer had failed to foresee the changing direction of his newspaper. The court granted the request, finding that “the continuation of the publication of the newspapers … will in all probability result in a serious impairment or destruction of a large portion of the trust assets.”

The Pulitzer case shows how limiting the power of executors and trustees can backfire – a problem that Jackson's lawyers obviously wanted to avoid.

Estate planning lessons

Estate planning is only enforceable when it is formalized in a document such as a will. Once formalized in writing, courts are reluctant to change an estate plan based on posthumous testimony about the testator's oral statements – even if those wishes were expressed to a parent.

Testators should therefore carefully review every provision of a will, including technical terms that may require explanation by a lawyer. Testators should also be cautious: it may be tempting to control assets from the grave, but restrictions that seem desirable during life can backfire after death.