Tuesday, October 20, 2009
Bridget J. Crawford (Professor of Law, Pace Law School), Joshua C. Tate (Assistant Professor of Law, SMU Dedman School of Law), Mitchell Gans (Professor of Law, Hofstra University School of Law), and Jonathan G. Blattmachr (Partner, Milbank, Tweed, Hadley & McCloy LLP) have posted on SSRN their article entitled Celebrity, Death, and Taxes: Michael Jackson's Estate, Tax Notes, Vol. 125, No. 3 (2009). The abstract is below:
The untimely death of Michael Jackson this past June presents an opportunity to reassess certain thorny estate tax issues that may arise when a celebrity dies owning valuable intellectual property. Elsewhere we have debated hypothetical, tax-motivated changes to state laws relating to postmortem publicity rights. This article focuses on existing legislation, like California’s, that makes publicity rights both devisable and descendible. Federal transfer taxes are levied on intangible property as well as tangible assets, and therefore apply to intellectual property, including a celebrity’s right of publicity and copyrights retained by an artist in his or her creations. Using Michael Jackson’s estate as an example, and focusing primarily on publicity rights, we examine two questions that any estate planner representing a celebrity client ought to consider. First, how should a personal representative value intellectual property for estate tax purposes? Second, what strategies are available to lessen the estate tax burden associated with certain intellectual property rights?