Michael Jackson’s Mom, Katherine Jackson, Prevented From Receiving Trust Funds Due To Estate’s Dispute With IRS

by Gee NY
Image Credit: Getty

In a heated dispute between Michael Jackson’s estate and the Internal Revenue Service (IRS), the late singer’s mother, Katherine Jackson, and his three children, Paris, Prince, and Bigi, cannot access their trust funds.

This financial deadlock stems from an ongoing contention over the estate’s tax obligations.

According to People, the executors of Jackson’s estate filed a report on May 28 clarifying that while the trust funds remain inaccessible due to the dispute, this does not affect the overall allocation of funds once the matter is resolved.

Despite the trust fund freeze, Katherine and the children continue to receive a substantial allowance from the estate. Since Michael Jackson died in 2009, Katherine has been a life beneficiary, receiving over $55 million.

The estate’s statement emphasizes their commitment to supporting Michael Jackson’s family:

“In annual reports provided to the probate court, which are publicly available, anyone can see that the Estate provides Michael’s mother and children with very substantial amounts of money to support them. The Estate has a very cooperative relationship with Michael’s children and whenever they need anything, the Estate works with them to ensure that they are very well taken care of, just as Michael would have wanted.”

The core of the dispute originated from an IRS audit of the estate’s federal tax return, which led to a claim that the estate had “undervalued its assets” and owed an additional $700 million in taxes and penalties.

The estate contested these findings in 2021 and won a motion for reconsideration concerning the value of Mijac, Jackson’s music catalog owned by Sony Music.

However, the estate’s final tax value is still undetermined, prompting the California Franchise Tax Board to request that a portion of the estate “remain subject to administration,” thereby affecting the family trust.

This new legal development follows an objection by Jackson’s son Bigi, who protested Katherine’s use of estate funds to cover her legal fees in a separate dispute about the executors’ management of the singer’s catalog sale to Sony.

Katherine contends that the executors are overly frugal with the estate’s funds and argues they can afford the costs she is requesting.

The filing asserts:

“… it seems clear to [Katherine] that the Executors are holding all of the assets in the Estate to keep control over them, and to avoid the more liberal distribution requirements of the Trust.”

While Michael Jackson’s children are the primary beneficiaries of the estate, Katherine remains the sole beneficiary of a sub-trust according to the late singer’s will.

As the legal battles continue, the Jackson family awaits the resolution of these financial disputes to access the trust funds intended for their support.

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