The James Brown estate battle is one of the more unusual and complex ones we have seen. As some may recall, his estate plan called for his music empire to be put into a charitable trust and used to help needy students. Nevertheless, the will has been the source of ongoing challenges since the musician passed away in 2006.
At one point a settlement was brokered by none other than South Carolina’s Attorney General Henry McMaster. However, that settlement was ultimately rejected by the South Carolina Supreme Court whose decision said the Attorney General’s plan had led to “the total dismemberment of Brown’s carefully crafted estate plan.”
One of the largest questions remaining is, “how much is the music empire worth?” Documents filed by the current trustee with the IRS valued the estate at $4.7 million, while earlier trustees valued the estate at $100 million. The full details of the dispute were reported by the Herald Independent in “The $95 million question: What’s at stake in Brown estate battle?”
The dispute matters greatly because charitable foundations are required to distribute at least 5% of their value to charity every year per IRS rules. Thus, there is a very large discrepancy in the total number of students that would be helped each year by the trust depending upon which valuation of the music empire is ultimately accepted by the courts.
Ensuring that your estate plan has been clearly communicated to your heirs is a crucial aspect of estate planning, and one often overlooked. Regular review of the plan to ensure it is up-to-date and can be easily executed at the time of death as well as clear communication with heirs to minimize the potential for family disputes are important parts of our process here at Family Estate Planning Law Group. For more information, explore our website and contact us to schedule a consultation today!
Reference: Herald Independent (September 4, 2015) “The $95 million question: What’s at stake in Brown estate battle?”