It’s the estate that keeps giving. Michael Jackson’s estate was heavily in debt when he passed away in 2009, but now, TMZ reports that his estate has nearly paid off the entire $500 million debt, thanks to royalties and earnings after the singer passed away.
TMZ claims to have legal documents showing that the estate of Michael Jackson generated gross earnings of $475 million as of the end of May. It appears that the only remaining debt is linked to his publishing catalog.
The estate's legal fees alone were in the millions; $13.6 million, to be exact.
When a person passes away, the duty to pay off his or her debts lies with the estate. If there isn't enough money to cover the debts, then the debts will go unpaid. While the executors of MJ's estate could have let the debts slide, the reality is that his estate was bound to generate income to pay the debts at some point and thus, there would have been cash for his creditors to come after.
Since Michael Jackson's death, his record and song sales have been through the roof. In addition to the sales of his songs, his estate has been raking in the cash from his stake in the Sony/ATV catalog. For 2010, Michael Jackson was the number two earner in the pop music category, right after U2, reports Forbes.
Jackson's estate cut a few deals after his death. Cirque du Soleil immortalized MJ in their show Michael Jackson: The Immortal World Tour. His estate also developed a licensing deal for his unreleased songs, reports Idolator; an agreement that will give the estate $200 million over the course of seven years.
How did Jackson end up in such debt? According to LAist, his debt came from many sources, including unpaid utility bills, a $5 million IndyMac loan and $341,000 due to his lawyer who defended him against child molestation charges.
- Search Directory of New York Estate Planning Lawyers (FindLaw)
- Legal Documents-- Michael Jackson's Cases (FindLaw News)
- Michael Jackson Estate Signs Record Deal with Sony (FindLaw's Celebrity Justice)