Prince and Michael Jackson were alleged to be the highest-profile celebrity rivals of the 1980’s. Now that both of them have passed, their legacies provide a superb case study in the importance of estate planning for musicians, athletes and other celebrities.
As of right now, no one has yet found Prince’s will. If that remains the case, and the late musician did not have a will, then under Minnesota law, his sister plus his five half-siblings would each get 1/6 of his estate. However, without a will, we will never know if that was what he would have wanted. From all reports (which may or may not be accurate given the Purple One’s penchant for making up interview answers and generally being reclusive) he didn’t have much of a relationship with his siblings. Additionally, Prince was a well-known philanthropist who has given millions of dollars to various charities over the years. It’s at least likely that he would have wanted a portion of his estate to benefit these charities and organizations. It was also well-known that Prince heavily restricted the use of his music, as well as his name and likeness. If he wanted to continue to restrict the use of his music, name or likeness, he could have done so by including such a provision in his will. Robin Williams and Adam Yauch of the Beastie Boys recently did the same. However, if there is no will, or if there is a will but it lacks a provision governing the use of music, name or likeness, the deceased’s estate is free to license those intellectual properties as it sees fit. And the estate may make those licensing decisions based more on financial concerns, and less on artistic concerns, than the artist himself would have. This is because these assets are non-cash, and given the value of his estate, his beneficiaries may be stuck with a $120 million tax bill that they can’t afford to pay, which may result in the auctioning of Prince’s catalog to satisfy the debt to the IRS. For more information, see http://www.hollywoodreporter.com/thr-esq/princes-estate-no-will-could-887717.
Similarly, Michael Jackson’s death has provided an example as to why it’s important for a celebrity to have their right of publicity appraised at regular intervals throughout their lifetime. The dispute over the appraised value of MJ’s right of publicity arises from the IRS proceedings to determine how much his estate owes in taxes. The estate says the value of his right of publicity is approximately $2000. The IRS claims it is $434 million. The issue is that from the estate’s point of view MJ’s right of publicity had very little value at the time of his death due to prior scandals and the lack of touring and endorsements. They argue that the value of his right of publicity rose dramatically only after his death and that the increase in value should not be subject to estate taxes because under IRS rules, the value is calculated at the time of death. Keep an eye on this one, because if the IRS wins, you can bet that they will be more aggressive seeking estate taxes from future celebrity deaths. For more information, see http://www.hollywoodreporter.com/thr-esq/what-is-michael-jacksons-image-884963.
Gary Laurie, a solo entertainment attorney in Clifton NJ can be reached at 973-634-4214 or [email protected].