07/03/2009 AT 11:25 AM ET
He gave two of his three children names befitting royalty, but the question remains whether the family of Michael Jackson – Prince Michael I, 12, daughter Paris, 11, and Prince Michael II (Blanket), 7 – stand to inherit a fortune, or a mountain of unpaid bills from a decade of the pop star living beyond his means.
According to the terms of Jackson’s 2002 will, his three kids and mom, Katherine Jackson, 79, are the only named beneficiaries of the trust he established and to which he left all of his assets. So what’s ahead for the kids? As a source familiar with Jackson’s finances puts it, “If someone hasn’t worked in ten years and continues to spend $100 million a year, they are going to have some financial problems.”
Pressured into Comeback
On the surface, it doesn t look good. It is estimated that Jackson’s lavish lifestyle landed him nearly $500 million in debt – a debt that would have to be taken on by his heirs. Taking for example his most treasured asset, the 2,800-acre Neverland Ranch, Jackson lost a majority stake in the property when, on the verge of losing it entirely to foreclosure, he signed it away to the New York-based Colony Capital company.
That financial instability pushed Jackson into his latest venture: a 50-concert comeback engagement that was due to begin in London this month. “He was definitely pressured in a way to go on the London tour,” said a source close to his finances. “The guy had so much anxiety about [the concerts], but he had debts and his home was going into foreclosure. He had to do it.”
A Good Businessman
Ironically, while he was big spender, Jackson also made wise business decisions over the years that could generate profit for his heirs. In 1985, he famously bought the rights to all the songs written by the Beatles for $47.5 million, then sold it back to Sony ATV for $150 million. In the last seven, the value of his estate has grown to an estimated $750 million.
“He was incredibly good businessman when it came to knowing who, what when and where to make a deal,” said a source with inside knowledge of Jackson’s catalog holdings.
Indeed, if his executors display the same kind of business acumen in marketing and selling of Jackson in the wake of his death, the children should be fine.
“All of the songs, compilations, and personal merchandise is much more valuable now than when he was alive and it wasn t being utilized properly,” says a source familiar Jackson’s finances.
But like most everything else surrounding Jackson’s death, how those profits will take shape and who will get the first slice of that sizable financial pie, remains up in the air.
“His estate is going to be in litigation for the next 20 years,” says a source close to his finances. “With people running around claiming they were somehow involved with Michael even though [they weren’t], and with all of his outstanding lawsuits, there is no way this is going to be settled anytime soon.”