With TIFF in full swing, celebrity worship is in overdrive. However, celebrities also deal with the mundane and there is often nothing glamorous about their estates. In fact, like the rest of us mere mortals, celebrities do not have a lock on getting things right. So often, there is so much money sloshing around, coupled with the absence of a properly drawn will, that estate fights are inevitable.
Michael Jackson’s estate has produced plenty of legal drama. A massive debt on death became a surplus as the appointed executors (which itself was not without controversy) carefully managed Jackson’s legacy so that his estate is now worth hundreds of millions of dollars. While the number of lawsuits has diminished over the past decade, the estate is still in court. The estate recently settled with Jackson’s former manager for a reported $20 million. However, on another front, the estate filed a lawsuit against HBO ahead of the release of Leaving Neverland, the controversial documentary chronically a dark chapter in Jackson’s life, which was released earlier this year. While Jackson had a will, it seemingly hasn’t helped much.
Prince died three years ago, but his estate remains unsettled. While Prince died of an accidental opioid overdose at his mansion in Paisley Park, no one was charged and the details of his death remain shrouded in mystery. What we do know is that Prince died without a will and that is where the trouble started. Prince’s estate is worth hundreds of millions of dollars. A generous royalty stream through the ongoing sale of his music will continue for decades. However, the net worth of the estate has yet to be officially determined, significant taxes are still due and owing, and his heirs – his six siblings – are still waiting for the estate to be distributed.
Jim Morrison’s estate also spun off litigation. Morrison, the lead singer of the Doors, died of an overdose in a Paris hotel room. His Paris grave site is a shrine to his most ardent fans (I went in the 80s and was disappointed). Morrison left a simple two page will. Morrison was famously estranged from his parents (he sang that he wanted to kill his father) and they were not mentioned in the will. Rather, Morrison’s girlfriend, Pamela Courson (widely regarded as his muse), was named as his beneficiary. Courson died three years after Morrison without a will (i.e. intestate). Her estate, which consisted of Morrison’s estate, therefore passed to her parents. Morrison’s parents then sued their son’s estate claiming that Morrison was incompetent to make a will and that his common law marriage to Courson was illegitimate. The two sets of parents ultimately settled by agreeing to split Morrison’s estate equally. Arguably, Morrison and the Doors were more famous after his death, such that his estate spun off millions of dollars.
Heath Ledger died while filming The Dark Knight in 2008. Ledger was hailed for his performance and won a posthumous Oscar for his performance of the deranged Joker. Ledger had an Australian will, but it was unclear whether Ledger was a resident of Australia or the US at the time of death. If Ledger was not a resident of the US, then the proceeds of a $10 million life insurance policy for his young daughter and any other assets located outside of the US would be excluded from his US taxable estate. However, if he was deemed a resident of the US, then all his assets (wherever located) would be taxed. Ledger could have helped answer whether he considered himself a resident of the US or Australia by updating his will. Moreover, Ledger died less than one year after he purchased his daughter’s $10 million dollar life insurance policy. As such, the insurance company could have contested the policy if Ledger had made any material misrepresentations on his insurance application, such as failing to mention the use of numerous prescription drugs. In the end, the insurance company did not contest the insurance policy (no doubt to avoid a chorus of negative press) and Ledger’s daughter received the insurance proceeds.
Finally, David Bowie left a $100 million estate when he died in 2016 at the age of 69. He was a UK citizen, but a resident of Manhattan. Bowie had two children by two different wives. Bowie set up a spousal trust for his second wife, Iman, which was capitalized with 50% of his residuary estate. Each of his two children received 25% of the residuary estate outright. Iman is entitled to all of the income from her trust and to encroach (i.e. take from) the capital or principal of the trust to fund her lifestyle, health, etc. On Iman’s death, the capital of the spousal trust will be left to his two children equally. However, Bowie also set up a trust for his youngest child to ensure that she did not receive her inheritance before the age of 25. While the Starman seemingly did everything right, he apparently could have even done more to avoid taxes.
What are we to make of the above? First, a messy life often results in a messy estate. Second, many celebrities have lots of money, scant or poorly drafted wills, many claimants and hanger-on’s, and assets that are not necessarily easy to manage. What could be more exciting to an estate litigator?
barbara grossmanSeptember 11, 2019 - 4:08 pm
A timely and interesting blog post Justin. Aretha Franklin can be added to your celebrity line up — her messy estate was covered in an earlier blog post.