PROTECTING AN ARTIST’S LEGACY THROUGH ESTATE
PLANNING, PROBATE AND POST-DEATH ADMINISTRATION OF
AN ARTIST’S RIGHTS
Presented by:
TAMERA H. BENNETT, Lewisville
Bennett Law Office, P.C.
KENNETH W. PAJAK, Austin
The Bannerot Law Firm, P.C.
Written by:
KENNETH W. PAJAK, Austin
The Bannerot Law Firm, P.C.
TH
20
State Bar of Texas
ANNUAL ENTERTAINMENT LAW INSTITUTE
October 7-8, 2010
CHAPTER 8.1
Protecting an Artist’s Legacy Through Estate Planning,
Probate and Post-Death Administration of an Artist’s Rights
Chapter 8.1
TABLE OF CONTENTS
I
INTRODUCTION................................................................................................................................................... 1
A Overview ......................................................................................................................................................... 1
II
ESTATE PLANNING FOR THE ARTIST ............................................................................................................ 2
A Planning For Issues Of Physical Being ........................................................................................................... 2
1 Medical Power Of Attorney .................................................................................................................... 2
2 Directive Of Physicians Regarding Life Support .................................................................................... 2
3 Declaration Of Guardian Of Person And Estate In Advance Of Need .................................................... 3
4 Declaration Of Guardian Of Minor Children .......................................................................................... 3
5 Directive For Mental Health Treatment .................................................................................................. 3
6 HIPAA Authorization .............................................................................................................................. 3
7 Out-Of-Hospital Do Not Resusitate Order (DNR) .................................................................................. 3
8 Appointment Of Agent For Disposition Of Remains .............................................................................. 4
9 Statutory Durable Power Of Attorney ..................................................................................................... 4
B Planning For Issues Of Wealth ........................................................................................................................ 4
1 Management Of Assets And Financial Decision Making During Life.................................................... 4
2 Management And Transfer of Wealth In The Most Efficient Manner After Death ................................ 5
III ESTATE PLAN EXAMPLE: BIG PICTURE VIEW OF ALLEGED MICHAEL JACKSON ESTATE ............. 8
IV CONCLUSION ....................................................................................................................................................... 9
SAMPLE REVOCABLE LIVING TRUST.................................................................................................................. 10
SAMPLE WILL WITH LITERARY TRUST .............................................................................................................. 20
SOS 3701 DECEASED NAME AND LIKENESS ...................................................................................................... 38
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estate assets, take years to settle due to lack
of planning, and tarnish the artist’s legacy.
Proper estate planning can minimize the
potential for probate litigation, make life
easier on those they left behind, and
preserve their artistic legacy.
Convincing artistic clients to plan for
the future by creating an estate plan is
challenging.
It is difficult enough to
schedule these clients for an appointment to
sit down and discuss a contract, but then to
seriously contemplate dying and create a
will that gives everything they’ve worked so
hard for to someone else, is almost always
an arduous task. Most artists want to focus
on living and creating music, and not on
dying and distributing assets.
So how do you get an artist to spend the
time and money on estate planning? One
way is to help the artist understand that
estate planning presents an opportunity for
them to exercise some control over their
musical legacy and reduce the possibility
their estate being depleted and their legacy
tarnished by probate litigation.
What artist does not want to be a
legend? What songwriter does not desire to
write a legendary song? What performer
does not want to make a recording to which
all others are compared? Artists want to be
remembered. In fact, I believe that most
artists have a deep desire to achieve
immortality through their creative works.
If an artist cares about his or her legacy,
then a comprehensive estate plan should be
implemented. Estate planning for creative
artists (musicians, songwriters, producers,
performers, etc…) can be compared to
crafting the song of one’s life and legacy. It
is much more than preparing a will or trust –
it is doing in the present what they can to
preserve their legacy for future generations.
ESTATE PLANNING: PRESERVING
AN ARTIST’S LEGACY
By Ken Pajak
“Can’t take it with you.
Everybody knows.
Can’t take it with you when you go.
Can’t hide your love away,
Save it up for a rainy day,
Ya can’t take it with you when you go.
Play it high or low.
Break the bank in Monte Carlo.
You can play it just the way it falls.
Cut it like you want to.
But it just might come back and haunt you.
Lady Luck’s your mama when she calls.”
By Dickey Betts and Don Johnson
© 1979 EMI Blackwood Music, Inc.
and Pangola Publishing Company
As recorded by The Allman Brothers Band
I. INTRODUCTION
George David Weiss, Hank Cochran,
Jimmy Dean, Bill Aucoin, Ronnie James
Dio, Richie Hayward, Teddy Pendergrass
and J.D. Salinger all died in 2010. One
glance at www.deadrockstars.com, a website
that chronicles the deaths of musicians,
producers, personal managers, and creative
artists, and you will likely agree with my
belief that those of us who are alive and well
are witnessing an unprecedented transfer of
intellectual property from those who created
musical and literary works in the 20th
century to their heirs or chosen distributees.
What if tomorrow never comes? One
website - www.deathlist.net - goes even
further and predicts the likelihood of certain
persons to die in 2010. That’s one list on
which I definitely do not want to see my
name.
I wonder how many of these persons
created a comprehensive estate plan? How
many had at least a simple will or trust?
Probate litigation is on the rise. Many
of these estates will likely be involved in
disputes between heirs, which can deplete
A. Overview
This article is intended to provide the
entertainment lawyer and non-probate
practitioner with a brief overview and highlevel answers to the following questions:
1) What is the general scope of estate
planning for an artist?
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9) Statutory Durable
Attorney (Financial).
2) How can advance directives help an
artist?
3) Why should an artist have at least a
simple will?
4) What is a literary trust? How can it
help an artist preserve his or her legacy?
Power
of
1. Medical Power of Attorney. Also
known as a “Durable Power of Attorney for
Healthcare,” this document names an
individual to make health care decisions on
the artist's behalf that the artist could make
if he or she were competent. A physician
must certify that the artist is incompetent,
and must make reasonable efforts to inform
the artist of any proposed treatment or
withdrawal or withholding of treatment
before acting under the advance directive.
The individual named to make decisions
on behalf of the incompetent person may
neither consent to voluntary inpatient mental
health services, convulsive treatment,
psychosurgery or abortion, nor neglect to
provide comfort measures for the person.
This power goes into effect upon
incompetence of the person and may be
changed or revoked at any time, orally or in
writing, without regard to the person’s
mental state or competency.
Notwithstanding
this
document,
treatment may not be given to or withheld
from the person if the person objects,
regardless of the person’s mental
competency.
II. ESTATE PLANNING FOR THE
ARTIST.
Estate planning primarily focuses on
two broad categories: 1) Issues of Physical
Being and 2) Issues of Wealth.
Issues of physical being concern care for
the body. They can be divided into two
groups: a) medical issues and decision
making during life and b) disposition of the
body after death.
Issues of wealth concern property
ownership, taxation, and transfer. They can
also be divided into two groups: a) the
management of assets and financial decision
making during life and b) the management
and transfer of wealth in the most efficient
manner after death.
A. Planning for Issues of Physical
Being. A person has the right to make her
own medical decisions, even if she is unable
to communicate. Estate planning provides
an opportunity to make some medical
decisions in advance. Accordingly, the
documents reflecting these advance
decisions are generally described as
“advance directives.”
The advance
directives that pertain to issues of physical
being are as follows:
1) Medical Power of Attorney;
2) Directive to Physicians;
3) Declaration of Guardian of Person
and Estate in Advance of Need;
4) Declaration of Guardian for Minor
Children;
5) Directive for Mental Health
Treatment;
6) HIPAA Authorization;
7) Out-of-Hospital Do Not Resuscitate
Order;
8) Disposition of Remains; and,
2. Directive to Physicians Regarding
Life Support. Also known as a “Living
Will,” this directive is a mechanism for a
artist to state, in advance, his or her wishes
regarding
foregoing
life-sustaining
procedures that would only serve to
artificially postpone the time of death in the
event he or she has a terminal or irreversible
condition. This directive may also designate
an individual to make a treatment decision
in the event the person becomes incompetent
or is mentally or physically incapable of
communicating his or her wishes. The
power goes into effect only if the person has
a terminal or irreversible condition, and is
incompetent
or
cannot
make
or
communicate decisions on his or her own
behalf. It may be changed or revoked at any
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time, orally or in writing, without regard to
the person’s mental state or competency.
guardians of our children’s physical person.
However, we are not the legal guardians of
our child’s financial affairs or their “estate.”
As such, if an artist has minor children,
the artist should appoint a guardian to take
care of their physical person if both parents
die or become incompetent before they
reach age 18 (one may choose to appoint a
married couple as co-guardians). This
guardian would be the guardian of their
person. By the same token, parents should
also appoint a guardian of their child’s estate
and appoint a trustee to manage any money
a child inherits.
3. Declaration of Guardian of Person
and Estate in Advance of Need. If an artist
becomes incapacitated to the extent that they
cannot care themself or their finances, a
guardianship may be required. This directive
allows an artist to designate who they want
to serve as their guardian in the event a
guardianship proceeding is filed.
There are two types of guardianships: 1)
Guardian of the Estate (Financial Affairs)
and 2) Guardian of the Person. A Guardian
of the Person holds the power to control the
physical presence of the “ward.”
For
example, the Guardian of the Person has the
power to place a ward in a nursing home.
The Guardian of the Estate has the duty to
manage a person’s financial affairs and must
account to the probate court for every dollar
spent.
An important feature of this
document is that you can designate who you
do not want to serve as your guardian and
the judge cannot appoint those persons
under any circumstance.
The purpose of another advance
directive, the Statutory Durable Power of
Attorney, (discussed below) is to avoid a
costly guardianship by naming a person to
act on behalf of an artist in the event an
artist is absent or incompetent. In the event
that a third party will not rely upon the
Statutory Durable Power of Attorney, a
guardianship becomes necessary and, once
granted, the Statutory Durable Power of
Attorney is automatically revoked.
5. Directive for Mental Health
Treatment. Texas law allows a person to
direct, in advance, the types of mental health
treatment that will be provided to them if it
is determined by a court that one’s ability to
understand the nature and consequences of a
proposed treatment, including the benefits,
risks, and alternatives to the proposed
treatment, is impaired to such an extent that
they lack the capacity to make mental health
treatment
decisions. “Mental
health
treatment” means electroconvulsive or other
convulsive treatment, treatment of mental
illness with psychoactive medication, and
preferences regarding emergency mental
health treatment. Although this directive is
not commonly used, its mere existence can
be a comforting if an artist has a history of
mental illness or if other circumstances
exist.
6. HIPAA Authorization. The Health
Insurance Portability and Accountability Act
of 1996 (HIPAA) contained medical privacy
rules that restrict disclosure of private
healthcare information. An artist can use
this directive to give permission to a medical
provider to disclose private healthcare
information to someone other than the artist.
4. Declaration of Guardian for Minor
Children. The most common motivation
for younger families to initiate estate
planning is the birth of a child. This event
often conjures up the following question:
Who will care for and raise my child in the
event that I cannot?
An estate plan should include a directive
identifying the person or persons who will
become the guardian of one’s child and a
guardian of that child’s financial affairs. As
parents, we are the natural and legal
7. Out-of-Hospital Do Not Resuscitate
Order (DNR). A person who is not
hospitalized can execute an out of hospital
DNR. This directive informs ambulance
paramedics that the person does not wish to
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receive life-saving assistance or treatment
such as cardiopulmonary resuscitation,
defibrillation, or other specified treatments.
A person in the final stages of a terminal
illness may consider this directive. This
DNR must be signed by two witnesses and
the attending physician. As such, it is
typically not prepared by a lawyer during
the estate planning process but, instead, is
most often prepared by a physician’s office.
guardianship of the estate is likely in the
incompetent artist’s best interest.
As you can see, these advance directives
can be utilized to protect an artist’s physical
being, assets, and business affairs during
life, which should help create continuity and
seamless transitions of personal and
business affairs in the event of
incompetency or death, thereby preserving
an artist’s legacy.
8. Appointment of Agent for
Disposition of Remains. “I want to be
cremated and my ashes…” If an artist
wishes to appoint someone to dispose of
their remains in a specific manner, or if
there is cause to believe that an artist’s loved
ones will have differing opinions as to how
remains are to be disposed, then this
directive should be considered as a means to
clearly specify to their loved ones who,
what, when, where and how to dispose of
their remains.
B. Planning for Issues of Wealth. As
stated above, issues of wealth concern an
artist’s property ownership, taxation, and
transfer. While this article is not intended to
be a thorough or exhaustive discussion of
intellectual property ownership, transfers
and associated rights, or federal and state
income or estate taxation, it is, however,
designed to generally re-introduce the
entertainment lawyer to wills and trusts, and
to facilitate probate by helping the
entertainment lawyer identify opportunities
for an artist to create and preserve their
assets and their legacy.
Additionally, because Congress has
created massive confusion concerning
federal estate, gift and generation skipping
taxation in 2010 and beyond, these tax
issues are beyond the scope of this
discussion. Until Congress cleans up its
mess, the entertainment lawyer discussing
estate planning with an artist client
concerned about federal estate tax should
advise the artist to consult with an estate
planning attorney. A prudent rule to follow
is that if the gross value of an artist’s estate
is $1,000,000 or more, then the estate
planner should be consulted to perform an
analysis of the artist’s exposure to estate
taxes based on the then current laws.
9. Statutory Durable Power of
Attorney. This document names an
individual to manage the financial, business,
property and legal affairs of an artist in the
event they cannot manage their affairs
themselves, for whatever reason (touring out
of the country, too busy, mentally
incompetent). The power is effective either
immediately upon execution or upon the
subsequent incapacitation of the artist and
may be changed or revoked at any time
while the artist has capacity. A power of
attorney may be broad or limited to certain
powers (i.e., publishing matters, real estate,
etc…). As such, a Statutory Durable Power
of Attorney can be tailored to manage only
an artist’s intellectual property.
As
mentioned above, it is also a useful tool to
avoid or defer the creation of a costly
guardianship of the estate of an artist in the
event they become incapacitated.
Although an agent acting under a power
of attorney is a fiduciary, there is little, if
any, oversight, which could lead to abuse.
Therefore, if oversight is desired, then a
1. Management of assets and financial
decision making during life. Artists can
preserve their legacy by prudently managing
their business affairs during their life.
Doing so will minimize problems commonly
encountered during the transition of the
artist’s business affairs from life to death.
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On the lowest level, this is done by the
artist themself and, unless properly advised
along the way, the ownership and transfer of
an artist’s intellectual property is often not
adequately documented. In these situations,
the estate planner or probate attorney often
finds that Copyrights are not registered,
licenses are not memorialized in writing,
and partnerships are not clearly defined. If
left undone, the probate administration of
this artist will be much more costly due to
the confusion and potential for litigation.
On the highest level, the more
successful artists have the resources to hire
attorneys, personal managers and business
managers to provide guidance and
counseling with regards to business affairs.
These artists often form loan-out companies
to, among other things, shield them from
personal liability and to receive income
generated from their professional services.
These artists also prudently centralize the
ownership and management of the artist’s
intellectual
property
in
business
organizations and revocable or irrevocable
living trusts, which are discussed below.
To preserve an artist’s legacy, these
formal business entities and trusts should be
organized to operate with little interruption
after the incapacity or death of the artist.
This can be done through proper business
succession planning within the company
and/or the appointment of successor trustees
after the death or incapacity of the current
trustee.
willing to invest in getting their affairs in
order, the estate planner may initially work
with the entertainment lawyer, personal
manager, business manager, or CPA to
identify or answer some or all of the
following before or after the initial meeting
with the artist:
Are all Copyrights registered and/or
appropriately titled?
What Copyright
exist?
renewal
rights
What termination rights exist?
Are all Trademarks registered,
asserted and/or properly titled?
Are
the
artist’s
business
organizations properly organized
and in good standing?
Has the artist created a trust?
If applicable, has the artist properly
documented transfers, assignments,
licenses to the business organization
or trust?
Does the artist have copies of all
assignments and licenses of
intellectual property?
Is the artist married? If so, does the
artist have a pre-nuptial or postnuptial agreement?
2. Management and transfer of wealth in
the most efficient manner after death. A
comprehensive estate plan should begin
with: 1) a basic evaluation of the current
business affairs of an artist; 2) an audit of
intellectual property ownership to identify
any problem areas or inconsistencies; and,
3) evaluation through use of a checklist of
items that may need to be done by the
entertainment lawyer so that the final estate
plan will accomplish the artist’s legacy
goals.
Depending on the scope of the estate
plan and how much money the client is
Which property is separate property
and which is community property?
Does the artist have children? Are
they from the current marriage?
Does the artist have a current will,
trust or advance directives?
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What are the current fair market
values of the artist’s businesses,
which may include ownership of a
publishing catalog or masters?
8. Minimize complexity of estate
administration;
9. Minimize the total tax liability of
the estate;
10. Minimize time for distribution of
estate to desired beneficiaries;
11. Minimize the likelihood of will
contests during estate
administration; and,
12. Maximizing control over one’s
artistic legacy.
Does the artist own any life
insurance policies?
What are the artist’s other assets and
how is each titled?
Has the artist named a beneficiary
on bank and investment accounts?
No Planning. A failure to plan ensures that
an artist’s property passes to the artist’s
heirs pursuant to state law. The Honorable
Judge Guy Herman of Travis County
Probate Court No. 1 has created a fine
descent and distribution diagram that can be
found at the following URL:
This is not an exhaustive list, but it will
provide the estate planner with enough
information to form an impressionistic
perspective of the artist’s management of
assets during life.
In the beginning, cost is always a factor.
As such, until the estate planner is able to
explain how the investment of time and
resources will help the artist, the estate
planner should curtail this list based on the
initial scope of representation. Some artists
merely want to initially create and pay for a
simple will and advance directives.
http://www.co.travis.tx.us/probate/pdfs/DnD
_diagrams.pdf
In addition, the Travis County Probate
Court’s website (www.co.travis.tx.us) is an
excellent source for practical and procedural
probate information.
Prioritize Goals. During the initial
meeting, the planner should identify the
artist’s most important goals. In general,
estate planning goals can be identified by
discussing the following common goals:
The main point to convey to artists is
that if an artist dies intestate, their property
could wind up in the hands of an heir who
has little or no interest in preserving the
artist’s legacy and who may deplete, waste,
or sell an artist’s valuable works to the
highest bidder.
1. Maximize control during life;
2. Maximize access to assets during
life;
3. Maximize preservation of assets
during and after life;
4. Maximize adequate management of
assets during surviving spouse’s
life;
5. Maximize family privacy;
6. Maximize desired management
arrangements after the death of
either one or both spouses;
7. Minimizing time of estate
administration;
Simple Will. For some artists, only a
“simple” will is desired. I define a “simple”
will as one that changes the intestate
distribution scheme and disposes of all
property to someone that the artist chooses.
It also appoints an executor to act without
bond and independent of court supervision,
thereby reducing the time and costs of
probate and maximizing efficiency.
At a minimum, executing a simple will
saves the artist money, allows an artist to
determine who inherits her estate, and
makes estate administration easier.
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Complex Plans. For other artists, a more
complex estate plan may be desired or
necessary.
These plans may include
creating new business organizations to own
intellectual property or testamentary trusts
designed to reduce or eliminate federal
estate, gift, and/or generation skipping
transfer taxes.
Many artists create a
revocable living trust (“RLT”) to manage
property during their life and to provide for
privacy and seamless transfer of property
after life.
A revocable living trust can be an
excellent tool for an artist to utilize in legacy
planning. In fact, Michael Jackson used this
tool in his estate planning.
A “RLT” is a trust established during
the artist’s life. The artist transfers some or
all property ownership to the RLT, which
may include ownership interests in a
business
organization
which
owns
copyrights or other intellectual property.
The artist can maintain control over their
assets by naming themselves as the trustee
of the trust. The artist is generally the
primary beneficiary of the trust income for
the duration of the artist’s life and can
invade the trust’s principal if desired.
Remainder beneficiaries, such as their
spouse and their children are identified to
receive trust income, principal or other
property upon the artist’s death. The artist
identifies successor trustees to serve in the
event of the artist’s incapacity or death. The
successor trustee then carries out the terms
of the trust and ensures uninterrupted
centralized management of the artist’s assets
already owned by the trust.
Attacking the validity of a RLT is more
difficult than attacking a will because,
among other things, they are in existence
prior to the incapacity or death of an artist
and likely function long before such
incapacity or death, thereby making them a
sound and impervious vehicle through
which the artist’s legacy lives on.
In addition, a RLT provides more
privacy than a will because the assets held in
the trust do not have to be inventoried and
made public as they are with property
passing under a will.
The caveat: as with any complex
arrangement, a RLT is more costly and it
requires close attention and maintenance in
order to work properly. All current assets
must be transferred into the name of the
trustee of the trust and assets purchase later
should be purchased in the name of the
trustee, not the individual artist.
Inevitably, some property is left out of
the trust and will need to pass through
probate. In order to ensure that all property
eventually passes to persons through the
trust, an artist will need to prepare a will at
the same time as the trust is prepared. This
type of will is referred to as a “pour-over”
will because it directs that some or all
probate assets “pour-over” into the RLT.
Regardless of the additional cost and
maintenance, a revocable living trust can be
the most appropriate vehicle for an artist
whose primary goal is preserving their
legacy.
Literary Trusts.
In recent years,
copyright owners have increasingly created
“Literary Trusts” to centralize ownership
and management of literary property. Such
a trust usually appoints a trustee experienced
in the exploitation and administration of
intellectual property. A Literary Trust may
hold only an artist’s literary works or
contain other properties as well. It can be
created as a revocable or irrevocable trust
during life or spring into existence after the
death of an artist. Additionally, an artist
could design the literary trust to function as
a non-profit trust.
In legacy planning, an artist will want to
appoint a Literary Trustee who will
prudently administer and manage the trust
literary property in such a way as to preserve
and foster the legacy of the artist. The trust
terms should give the trustee all of the
powers necessary to administer the literary
property. Attached are examples of a
Revocable Living “Literary” Trust and a
testamentary literary trust.
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I have heard rumors of some estate
planners naming a “Literary Executor.” In
Texas, the executor is court appointed and is
a fiduciary responsible for administering the
whole probate estate and can be personally
liable for certain actions taken as executor
and, arguably, for actions taken by a coexecutor.
Therefore, although, it is
conceivable that an artist can appoint coexecutors and designate one executor to
manage only the literary properties, in my
opinion,
the
added
planning
and
administration expense, coupled with
potential liability exposure for the acts of a
co-executor, may not be justify naming a
“Literary Executor.” I personally believe
that creating a testamentary literary trust
identifying a “Literary Trustee” would be a
cleaner and more efficient vehicle to achieve
the artist’s desired goals.
Michael Jackson’s Will and Application for
Probate filed in the California Probate Court
can be found here:
http://i.cdn.turner.com/cnn/2009/images/07/
01/mj.will.pdf
Assuming the above-referenced Family
Trust is the governing trust document, it
provides that Michael Jackson was entitled
to receive all of the net income from the
Family Trust, plus as much of the principal
as he requested.
Michael’s post-death
distribution plan divides his estate among
charities, his children, and his mother.
20% to Charity. More specifically,
Michael first gives 20% of the Family Trust
to charity for the benefit of “children and/or
children’s causes” after his death.
Estate Taxes. After this gift is made,
the Trustee is directed to pay all federal and
state taxes and the costs of estate
administration.
Remaining Balance: 50% to Mom and
50% to Children. If Michael Jackson was
survived by any of his children, and
Katherine Jackson also survived Michael,
then 50% of the remaining trust balance was
to be designated the “Michael Jackson
Children’s Trust” and 50% of the remaining
balance is to be designated the “Katherine
Jackson Trust.”
However, if no children survive
Michael, and Katherine Jackson survived
him, then 100% of the remaining trust
corpus would be designated the “Katherine
Jackson Trust.” Similarly, if Katherine
Jackson failed to survive Michael, and at
least one child survived him, then 100% of
the remaining trust corpus was to be
designated the “Michael Jackson Children’s
Trust”.
If neither Katherine Jackson nor any
child survived Michael, then 100% of the
trust corpus was to be designated the
“Michael Jackson Relatives Trust” for the
benefit of his nieces and nephews, "Levon
Jackson, Elijah Jackson, Anthony Jackson,
Taj Jackson, Tarylle Jackson, and T.J.
Jackson."
III. Estate Plan Example: Big Picture
View of Alleged Michael Jackson Estate
Plan
Revocable Living Trust with a Pour-Over
Will
In 1995, Michael Jackson is believed to
have set up a revocable living trust known as
the Michael Jackson Family Trust (“Family
Trust”).
Based on customary estate
planning, it is assumed that he also executed
a “pour over” will at the same time. As
previously stated, a “pour over” will
compliments a revocable living trust and
directs the executor to pour over any
remaining assets that were not transferred to
the Family Trust during his life.
The document linked below purports to
be an Amended and Restated version of the
Family Trust referenced above dated March
22, 2002. The validity of this document is
unconfirmed. A digital copy can be found
here:
http://www.sofloridaestateplanning.com/upl
oads/file/JacksonTrust.pdf
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Protecting an Artist’s Legacy Through Estate Planning,
Probate and Post-Death Administration of an Artist’s Rights
Chapter 8.1
___________________________________________________________________________________________________________________________
If the Katherine Jackson Trust is
created, then she shall receive as much of
the net income or principal as the Trustee
may determine for her “care, support,
maintenance, comfort, and well-being.”
Upon Katherine’s death, any remaining
balance shall go to the Michael Jackson
Children’s Trust and, if none, then to the
Michael Jackson Relatives Trust.
If the Michael Jackson Children’s Trust
is created, then it shall be divided among his
children and each shall receive the net
income quarterly, subject to the discretion of
the Trustee. Upon a child reaching the age
of 21, the Trustee shall distribute the net
income to each child at least annually.
Upon reaching age 30, a child shall receive
1/3 of the then trust principal. Upon
reaching age 35, a child shall receive 1/2 of
the then trust principal. Upon reaching age
40, a child shall receive all of the then trust
principal. If a child dies before such
termination, then the balance shall go to that
child’s issue and, if none, to Michael’s then
surviving children. If no surviving children
exist, then to the Michael Jackson Relatives
Trust.
If the net income is insufficient for the
child’s care, support, maintenance or
education, then the child may dip into the
principal. In addition, if a child wishes to
purchase a home or start a business with a
sound business plan, then the Trustee may
distribute such amounts as he or she deems
appropriate.
This is just one example of an estate
plan and the documents available to us
represent only a piece of Michael Jackson’s
overall estate plan. It is highly probable that
he created life insurance trusts for his
children and implemented other estate tax
motivated tools of which we are not aware.
Proper estate planning can minimize the
potential for probate litigation, make life
easier on those that artists leave behind, and
preserve an artist’s legacy.
As such, entertainment lawyers,
personal managers, business managers
should address the issue of estate planning
when advising their artist clients. Artists
should know that estate planning presents an
opportunity for the artist to exercise some
control over their musical legacy and reduce
the possibility their estate being depleted
and their legacy tarnished by probate
litigation.
If an artist cares about his or her legacy,
then a comprehensive estate plan should be
implemented to preserve their legacy for
future generations.
IV. Conclusion. Probate litigation is on the
rise. Many artist estates will likely be
involved in disputes between heirs, which
can deplete estate assets, take years to settle
due to lack of planning, and tarnish the
artist’s legacy.
*Special thanks to Kenton J. Yaklin, J.D. Candidate,
May 2011 for his assistance in researching and securing
content for this chapter.
9
Protecting an Artist’s Legacy Through Estate Planning,
Probate and Post-Death Administration of an Artist’s Rights
Chapter 8.1
COPY
TRUST AGREEMENT CREATIVE THE
_____________________LITERARY TRUST
This Trust Agreement is made by and among_____as Trustor, and _________and _____as Trustees. When the term
Trustee is used in this Trust Agreement, it shall refer to both Trustee, if both are acting; or to one Trustee, if only one
Trustee is then acting.
1. Identification of Property. Trustor has transferred and delivered to the Trustee the property described in Exhibit
“A” attached hereto and made a part hereof. The Trustee accepts such property in trust under the terms of this Trust
Agreement. Trustor reserves the right to Trustor or to any other person to add any other property, whether real,
personal or mixed, by deed, will or any other manner to the trust herein created, subject to the Trustee’s acceptance,
and any such property so added shall be subject to the terms of this Trust Agreement.
2. Identification and Purpose of Trust. The Trust created hereunder shall be known as the __________Literary
Trust. The purpose of the trust is to provide for the unified management of the literary work created by _______ and
the copyrights relating thereto, so as to maximize its value and enhance the literary reputation of___________.
3. Distribution Provisions of REVOCABLE TRUST. The trust estate of the Literary Trust shall be held on the
following terms, as well as on all other applicable terms of trust in this Trust Agreement:
(A)
The Trustee shall distribute annually the net income of the trust, including any royalty payments
relating to the copyrights associated with the literary work created by _____to or for the benefit of ________.
After the death of ________, the Trustee shall distribute annually the net income of the trust equally to or for
the benefit of _______and ______if both of them are surviving, or all to the survivor of them, if only one of
them is surviving; provided that, if______or______is not then surviving, the portion of the net income of the
trust to which such predeceasing person would have been entitled if he were surviving shall be distributed to
the issue of such predeceasing person, per stripes.
(B)
The trust shall terminate when the Trustee, in the Trustee’s sole reasonable discretion, determines
that the trust is no longer necessary to manage the literary work of ___and any copyright associated with
such literary work. Upon the termination of the trust, the then remaining trust estate, if any shall be
distributed to____, if she is then surviving. If______is not then surviving, the then remaining trust estate
shall be distributed equally to ___d ___, if they are both surviving, or all to the survivor of them, if only one
of them is surviving; provide that, if___
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Protecting An Artist's Legacy Through Estate Planning,
Probate and Post-Death Administration of an Artist's Rights
Chapter 8.1
• • •11 or
is not then survlvmg, the portion of the then
remaining trust estate to which such predeceasing person would have been entitled
if such predeceasing person were surviving shall be distributed to the issue of such
predeceasing person, per stirpes.
4. Withdrawal PrOVisions. the Trustor may from time to time by giving the Trustee
reasonable notice in writi alter amend, revoke or terminate the trust and this Trust
Agreement, and upon receipt of any such notice, the Trustee promptly shall take suc
action as may be appropriate to carry out Trustor's instructions_ If any portion of the
trust estate is withdrawn by Trustor, this Trust Agreement shall terminate as to the
property so withdrawn, but shall continue as to all other property of the trust estate not
so withdrawn. If this Trust Agreement or any provision hereof is altered or amended, the
duties, powers, responsibilities and liabilities of the Trustee shall not be substantially
changed without the Truste~'s consent. In the event a guardian for Trustor should be
appointed by any court of competent jurisdiction, this trust shall be irrevocable by such
guardian and shall not be subject to amendment during the existence of such
,guardianship. This Trust shall become irrevocable upon the Trustor's death.
S.. Designation, Appointment and Removal of Trustee.
The designation and
appointment of any substitute or successor Trustee of the' trust created hereullder shall be
made as follows:
(A)
Iffor any reason and at any time
or
L is
unable or unwilling to act as Trustee, the one of them who is able and willing so to
a,ct is appointed as Sole Trustee.
and 7 t ; acting together
(or the one of them who is able and willing so to act, if the other of them is not
able and willing so to act), may appoint in writing, as a successor Trustee, one or
. Sand I C J, has the
more individuals who, in the opinion of I
literary knowledge and background to effectively carry out the purpose of the trust
created hereunder. It is Trustors' desire that at all times during the existence of the'
trust, an. individual who is f~miliar with
work and who is
knowledgeable and has expenence m deahng Wlth hterary works be a Trustee or
the trust creats
