Michael Jackson’s three children and his mother, Katherine, are currently unable to access funds from the late pop star’s estate due to an ongoing dispute with the IRS. Court documents obtained by People and ET Online reveal that MJ’s children—Prince, Paris, and Bigi—along with their grandmother, are unable to receive money from the executors of his estate while legal issues persist.
The children are beneficiaries of MJ’s trust, while Katherine is a beneficiary of a sub-trust. The executors of MJ’s will, John Branca and John McClain, have declined a request from attorneys to release a portion of the estate for distribution as they are unable to accurately determine a safe amount to be distributed at this time.
The IRS conducted an audit of the federal estate tax return and discovered that the estate had undervalued its assets, resulting in an estimated $700 million owed in taxes and penalties. The estate disputed these findings in 2021 and emerged victorious in tax court that same year. However, the estate has since requested a reconsideration of the value of MJ’s music catalog, Mijac, which was partially acquired by Sony for at least $600 million in February. This motion is still pending, delaying the final valuation of the estate.
The executors have specified that 20 percent of the estate, as valued for federal estate tax purposes, must be donated to charity before the remaining assets can be distributed to sub-trusts. Until the dispute is resolved, this charitable donation cannot be made. Despite this, the family will continue to be provided for through a family allowance.
The estate assured the public that MJ’s mother and children are receiving substantial financial support to meet their needs, as evidenced in annual reports submitted to the probate court. They emphasized the cooperative relationship between the estate and MJ’s children, ensuring that they are well taken care of, consistent with what Michael would have wanted.