Michael Jackson's $2 billion estate is currently entangled in a controversial legal battle with the IRS over tax matters.
The situation allegedly puts pressure on the late icon's three children and his elderly 94-year-old mother, leaving them struggling for funds as their anticipated inheritance remains out of reach.
The unexpected legal filing on May 28, 2024 caught Katherine Jackson and her grandchildren Prince, Paris, and Bigi off guard.
According to legal papers obtained by Globe, John Branca and John McClain, Jackson's estate administrators, cannot accurately calculate the suitable distribution amount for the four beneficiaries from the extensive trust fund until the federal authorities finalize the valuation of the singer's music catalog, estimated to be over $1.2 billion, with half sold to Sony.
The estate's tax filing revealed that the IRS had accused them of undervaluing assets by $700 million. This led to a dispute over the valuation of Jackson's iconic songs.
However, in 2021, the initial ruling was reversed, prompting the executors to request the IRS to reevaluate the estate's assets.
An insider disclosed to the magazine, "This situation has put the kids and Katherine in financial straits. There's a real possibility of them running out of cash before it's resolved because they don't exactly live frugal lives."
"The kids are accustomed to opulence and luxurious living - and Katherine's medical bills are enormous for virtually around-the-clock care."
Moreover, insiders reveal uncertainties regarding the inheritance as it is unclear how much will remain for the singer's family members once all taxes have been accounted for.
Notably, his will dictates that a significant portion of his estate, precisely 20 percent, is to be allocated to charitable causes before any distribution occurs.
"The whole family seems to spend money like it's water. [Jackson] must be turning over in his grave!"
An estate representative emphasized that ample financial support is being extended to the collective during the ongoing dispute with the IRS.
The executors maintained that they have accommodated almost all of Katherine's requests for her well-being and upkeep, highlighting that she has been allocated over $55 million following the tragic death of her son at 50 in 2009.
A spokesperson emphasized the ongoing issue, stating that state law, not the executors, is causing the delay in the distribution of funds.
This recent legal battle concerning the "Billie Jean" singer's estate is part of a series of conflicts.
In April 2024, court documents revealed Katherine's argument that the executors were overly cautious in allocating funds for herself and the three kids.
Later on, Bigi insisted that the estate stop covering his grandmother's increasing legal expenses for her attempt to halt the planned Sony sale supported by Prince, Branca, and McClain.
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