Michael Jackson’s family is currently unable to access his trust money due to an ongoing legal battle.
The executors of the late King of Pop’s will, John Branca and John McCain, have informed Prince, 27, Paris, 26, Bigi Jackson, 22, and Katherine Jackson, 94, that they will not receive any funds from the trust until the dispute is resolved.
The conflict arose when the IRS audited the estate’s federal tax return and claimed that the assets were undervalued, resulting in a demand for an additional US$700 million (NZ$1.1 billion) in taxes and penalties.
Despite the estate winning a trial in tax court in 2021, a motion for reconsideration has been filed regarding the value of Mijac, Michael’s catalogue owned by Sony Music. Until the value of the estate is determined for tax purposes and both parties reach an agreement on deductions, the family will have to wait for a final decision.
While the process is still ongoing, attorneys have requested for a portion of the estate to “remain subject to administration” to distribute it to the Michael Jackson family trust.
However, the executors have rejected this request, stating that they are unable to determine a safe amount for distribution at this time.
Additionally, the trust mandates that 20% of the estate, as valued for federal estate tax purposes, must be allocated to charity before the remaining assets can be distributed to sub-trusts.
This indicates that a resolution of the dispute is necessary in order to determine the exact size of the charitable contribution.
The executors have proposed that, until this issue is resolved, the estate should provide for Michael’s children and his mother through “the family allowance”. Until then, the executors recommend that the estate continue to support the children and his mother through “the family allowance”.
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