Michael Jackson was supposedly almost bankrupt & yet now his estate has gazillions - What happened?

[astro]

There were tons of stories in the years before he died how Michael Jackson was near broke and was scrambling to keep going day to day. Now he's dead and his estate has (according to news reports) gazillions that his relatives are fighting over.

If he was really busted toward the end of his life, where did all the money come from?

[Isamu]

I suspect that he had low liquidity but plenty of assets. Neverland, for example, must be worth a ton.

[shantih]

I would also speculate that there was a surge in sales of his music after his death.

[Little Nemo]

Jackson had great prospects for future income. He owned the rights to songs that were going to produce an ongoing stream of royalties.

His problem was that he wanted the money now. So he borrowed heavily against his future income. That left him deeply in debt so he was technically bankrupt.

But the rights are still there. I'm assuming his family members are fighting for control of those rights so they can follow his example and start borrowing off their future value.

[Alka Seltzer]

In short - he died. It was a financial master-stroke. His expenses steeply declined, while sales experienced a strong surge on the back of all the free publicity.

[obfusciatrist]

Yeah, I'd agree with that. He wasn't broke because he wasn't making money. He was broke because he was spending more money than he was making. By dying he stopped spending but keeps making.

[Wendell Wagner]

You can find a lot of articles online about his spending habits like this one:

http://www.telegraph.co.uk/culture/m...him-broke.html

He was making a lot of money each year, even toward the end of his life. He was still spending $20 million to $30 million a year more than he made during that time. The same thing happened to Elvis. Once he died, his estate made sure that the money was wisely spent and invested well.

[ftg]

Another example of an estate that turned around is Elvis Presley's. It took a while but eventually Priscella got things under control, managed the licensing well, etc.

Went from a pittance to a major estate.

Apparently being a drug-addled weirdo who can't sleep and has questionable "friends" doesn't make you a financial wiz.

[sciurophobic]

To quote Unca Cecil, there's nothing like sudden death to give your career a good shot in the arm.

[ZipperJJ]

Originally Posted by Little Nemo

That left him deeply in debt so he was technically bankrupt.

Is his debt all written off now or is there stuff the estate had to cover?

[Alka Seltzer]

Hotblack Desiato would be proud of him.

[Chimera]

Bottom line: The man is no longer there to spend it faster than it was being accumulated.

[Ethilrist]

Profit!

[DiosaBellissima]

I agree with what was said-- he wasn't broke, he was just cash poor. Remember, he owned his entire catalog, plus half of the Beatles catalog. In fact, according to Michael's batshit crazy family and several friends, he supposedly would regularly say that someone was going to kill him to gain access to both catalogs.

[Dr. Righteous]

Originally Posted by Ethilrist

Profit!

Aha! Now we know:

Step 2: Die

[Little Nemo]

Originally Posted by ZipperJJ

Is his debt all written off now or is there stuff the estate had to cover?

I assuming the debts had to be paid off. But the key factor, as others have said, in turning his finances around is Jackson died and stopped borrowing more money.

[Little Nemo]

Originally Posted by DiosaBellissima

I agree with what was said-- he wasn't broke, he was just cash poor. Remember, he owned his entire catalog, plus half of the Beatles catalog. In fact, according to Michael's batshit crazy family and several friends, he supposedly would regularly say that someone was going to kill him to gain access to both catalogs.

It's a lot bigger than that. Jackson was co-owner of Sony/ATV Music Publishing. The company has an estimated annual income of around two billion dollars.

[Sampiro]

The week he died Amazon and several other major online retailers sold out of his CDs, his Number Ones collection went from #123 on the charts to #1, and 43 of his songs hit the Top 200. Cite

This surge alone would have given his estate the liquidity to help deal with the most pressing financial needs. No idea what his life insurance situation was like but I'm guessing it was, to use his own frequently used phrase regarding his money, "up there", and any money owed to the promoters for his upcoming dates would have been paid back by insurance (which is standard) and not from his estate.

Plus just the scraps of his empire would allow you and your closest loved ones to live in the 1% for the rest of your life. We're not talking moderately successful sitcom co-star "lots of money" but richer than the guy who owns that sitcom and 12 others" amounts of money; when it's impossible to estimate your personal worth even to the nearest $100 million or your income to the nearest $10 million, there's a shitload of money in there.

Plus, I would think that a lot of his assets were probably protected from any kind of creditors and-or set up in the names of other people and of trusts and the like and even had the worst happened to him financially in his lifestyle he'd not only never have missed (whatever passed for a meal for him), he'd never have been folding his own clothes or driving his own car or having to clip coupons to live lavishly.

[Lemur866]

Originally Posted by ZipperJJ

Is his debt all written off now or is there stuff the estate had to cover?

His estate has to cover all of his debts. The creditors get paid before the heirs. However, if after liquidation the estate is can't cover all the debts, the creditors can be screwed. They can't go after the heirs to cover the deceased's debts. If the estate is worth nothing, or less than nothing, there is no estate to distribute to the heirs.