Michael Jackson's Kids and Mom Get No Distributions from Trust Until Estate and IRS Settle Dispute, Lawsuit Reveals
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Prince, Paris and Bigi Jackson are beneficiaries of the King of Pop's trust, while his mom Katherine is a sole beneficiary of a sub trust in his will
Carlo Allegri/Getty Michael Jackson
Michael Jackson's beneficiaries, including his mom Katherine and three kids Paris, Prince and Bigi, will not receive financial distributions from his trust until an ongoing dispute between his estate and the IRS is resolved.In a May 28 filing obtained by PEOPLE regarding the King of Pop's ongoing estate case, the executors under his will decided that so long as the legal disputes continue, his beneficiaries will not receive distributions.The ongoing legal dispute began when the IRS audited the estate's federal estate tax return and "issued a note of deficiency" claiming that the estate "undervalued its assets" and owed "an additional $700 million in taxes and penalties," the filing states.In 2021, the estate disputed those assessments and won in 2021 after a trial in tax court. Since then, however, the estate filed a motion for reconsideration regarding the court's value of Mijac (his music catalog owned by Sony music) that remains pending.
Alan Chapman/Dave Benett/Getty Prince, Paris and Bigi Jackson
Related: Katherine Jackson Responds to Grandson Bigi's Objection to the Jackson Estate Paying Her Legal Fees amid Ongoing Battle
Therefore, the value of the estate for tax purposes has not been determined. Once it is, the IRS and the estate need to agree to the value of deduction before a final judgement can be entered.While that process is underway, attorneys requested that a portion of the estate "remain subject to administration" while the remaining legal issues are resolved to distribute to the Michael Jackson family trust.John Branca and John McClain, the executors under the will of the pop star, rejected the request because they cannot "possibly determine what amount could be safely distributed at this time," per the filing.In addition, the trust "requires that 20 percent of the estate 'as valued for federal estate tax purposes' be distributed to charity before the remaining assets of the estate can be distributed to sub-trusts." A resolution of the dispute is "necessary" to determine the charitable contribution.Until then, the executors suggest that the estate provide for the kids and his mother through "the family allowance."The new filing comes two months after Katherine responded to her grandson Bigi's objection to her using funds from Michael's estate to pay her legal fees in an ongoing dispute with the executors over the singer's catalog sale to Sony.
Justin Sullivan/Getty Katherine and Michael Jackson
Related: Inside the Fight over Michael Jackson's $2 Billion Estate — and His Mom's Battle with Her Grandson Bigi
In the filing, Katherine alleged that the executors are being too frugal with how the estate money is being awarded to its beneficiaries and argued that they can afford to cover the costs she's requesting.The filing stated, "... it seems clear to [Katherine] that the Executors are holding all of the assets in the Estate in order to keep control over them, and to avoid the more liberal distribution requirements of the Trust."The filing also made an argument against 20 percent of the estate being donated to charities: "...Nothing in the Trust requires those payments to be made before any preliminary distribution to other beneficiaries."Katherine herself is not a beneficiary of the estate like the singer's children, but is instead a sole beneficiary of a sub trust in Michael's will. For more People news, make sure to sign up for our newsletter! Read the original article on People.
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