http://www.people.com/people/package/article/0,,20287787_20289231,00.html
INSIDE STORY: Will Jackson's Kids Inherit a Fortune or a Pile of Debt?
By Oliver Jones and Hitha Prabhakar
Originally posted Friday July 03, 2009 11:25 AM EDT
Blanket, Paris and Prince Jackson
Photo by: Splash News Online
He gave two of his three children names befitting royalty, but the
question remains whether the family of Michael Jackson – Prince
Michael I, 12, daughter Paris, 11, and Prince Michael II (Blanket), 7
– stand to inherit a fortune, or a mountain of unpaid bills from a
decade of the pop star living beyond his means.
According to the terms of Jackson's 2002 will, his three kids and mom,
Katherine Jackson, 79, are the only named beneficiaries of the trust
he established and to which he left all of his assets. So what's ahead
for the kids? As a source familiar with Jackson's finances puts it,
"If someone hasn't worked in ten years and continues to spend $100
million a year, they are going to have some financial problems."
Pressured into Comeback
On the surface, it doesn’t look good. It is estimated that Jackson's
lavish lifestyle landed him nearly $500 million in debt – a debt that
would have to be taken on by his heirs. Taking for example his most
treasured asset, the 2,800-acre Neverland Ranch, Jackson lost a
majority stake in the property when, on the verge of losing it
entirely to foreclosure, he signed it away to the New York-based
Colony Capital company.
That financial instability pushed Jackson into his latest venture: a
50-concert comeback engagement that was due to begin in London this
month. "He was definitely pressured in a way to go on the London
tour," said a source close to his finances. "The guy had so much
anxiety about [the concerts], but he had debts and his home was going
into foreclosure. He had to do it."
A Good Businessman
Ironically, while he was big spender, Jackson also made wise business
decisions over the years that could generate profit for his heirs. In
1985, he famously bought the rights to all the songs written by the
Beatles for $47.5 million, then sold it back to Sony ATV for $150
million. In the last seven, the value of his estate has grown to an
estimated $750 million.
"He was incredibly good businessman when it came to knowing who, what
when and where to make a deal," said a source with inside knowledge of
Jackson's catalog holdings.
Indeed, if his executors display the same kind of business acumen in
marketing and selling of Jackson in the wake of his death, the
children should be fine.
Legal Morass
"All of the songs, compilations, and personal merchandise is much more
valuable now than when he was alive and it wasn’t being utilized
properly," says a source familiar Jackson's finances.
But like most everything else surrounding Jackson's death, how those
profits will take shape and who will get the first slice of that
sizable financial pie, remains up in the air.
"His estate is going to be in litigation for the next 20 years," says
a source close to his finances. "With people running around claiming
they were somehow involved with Michael even though [they weren't],
and with all of his outstanding lawsuits, there is no way this is
going to be settled anytime soon."
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