Though authorities are expected to pinpoint Michael Jackson’s cause of death within weeks, settling the King of Pop’s estate — homing in on Jackson’s assets, determining his debts and divvying up what’s owed to creditors and promised to beneficiaries — could take far longer.

“This is going to be a major headache. These are matters that could take years and years to settle and could touch off a feeding frenzy,” says Stephen J. Silverberg, a New York attorney who specializes in estate planning and has represented other celebrities. Bickering over the estate of famed guitarist Jimi Hendrix, who died in 1970, lasted until 2005, Silverberg notes, although litigation continues over profits from use of Hendrix’s image.
Jackson, 50, grossed about $1 billion in a career that spanned more than 40 years. But his legendary reputation for profligate spending and his huge legal bills could leave little for his three children and other beneficiaries, considering that creditors’ claims could range to $400 million or more.
If the liabilities exceeded the assets, “you would have a bankrupt estate, and a court would divide up the assets among creditors, much like you would have in a bankruptcy proceeding,” says San Francisco attorney Max Gutierrez Jr.
Jackson’s estate is also subject to federal inheritance taxes of up to 45 percent, depending on what was placed in tax-limiting personal or family trusts. A trust arrangement also would keep much of the estate disbursement private and out of probate court but wouldn’t prevent public scrutiny from legal challenges by creditors and other claimants.
“It wouldn’t surprise me if there were other people making claims,” says Roy Kozupsky of New York law firm Smith, Gambrell & Russell.
Moreover, if it’s determined that Jackson’s permanent residence was in California, his estate could be subject to millions of dollars in state probate fees, which are assessed on the value of the estate before debt.
Even the valuation of Jackson’s most valuable asset — his stake in a music catalog whose publishing rights includes Beatles songs — could be subject to protracted debate. Jackson snapped up the catalog for $47.5 million in a 1985 deal that had provided him millions in annual income, and he pocketed $95 million from selling Sony a 50 percent stake in 2005.
The catalog continued to bankroll a lifestyle that included maintaining the 2,700-acre Neverland Ranch, expensive art purchases and litigation, including a multimillion-dollar out-of-court settlement to the family of a boy who had accused him of molestation. Jackson used the catalog as collateral against assorted loans, with $300 million in debt to Barclays Bank alone.
“The big question is how the publishing rights, particularly The Beatles, are going to be valued in such a difficult market for music,” says Alan Light, former editor of music industry magazines Spin and Vibe. “It’s very hard to know what kind of figure to put on that.”
Jackson’s own music has residual value, though his songs haven’t generated as much money as that of performers in some other genres, such as rock. “He hasn’t been huge as a catalog artist,” Light says. “It’s not a reflection on his music. (R&B) doesn’t sell as consistently as that in other recording genres.”
Jackson also has value as a media and marketing icon, and heirs are entitled to holding rights for decades. Considering his pop-culture status, “it could be a monster of a number,” says New York attorney David Jacoby of Schiff Hardin. Iconic images of artists such as Hendrix, Marilyn Monroe and Elvis Presley continue to generate revenue long after their deaths.
Some aren’t so sure Jackson has such potential, given his tarnished image from charges of child molestation, multiple plastic surgeries and years of odd behavior. Despite the upcoming, sold-out concert tour that could have bolstered Jackson’s comeback, “over time, there was a lot of resistance to people doing endorsements with Michael Jackson as his image underwent so much battering,” Light says.
Ultimately, the King of Pop may be a relative pauper when it comes to what remains of his finances.
“When he was focused, he could produce revenue at levels few could match. But you hear wildly different valuations of what he was really worth and what he owes creditors,” says Bob Rasmussen, dean of the University of Southern California’s Gould School of Law. “Sadly, it’s possible that the most successful pop entertainer of our time died insolvent.”