Famous Wills and Tax Lessons – 2025 Update
When a celebrity dies, their estate often makes as many headlines as their career did. What the public rarely sees, however, is the tax mess left behind. Poor planning, outdated wills, or no wills at all can create enormous liabilities — and those tax burdens are not limited to the rich and famous. Every Australian can learn from these high-profile mistakes.
1. Michael Jackson — The Battle Over Estate Valuation
Michael Jackson’s estate became infamous for its dispute with the U.S. tax authority. The IRS claimed his name and likeness were worth over $400 million, while his executors argued they were almost worthless at the time of his death. Years of litigation followed before a settlement was reached.
Australian Lesson:
Here, the ATO doesn’t tax estates directly, but it does scrutinise capital gains tax (CGT) on inherited property and the ongoing income from intellectual property. The Jackson case shows how disputes over valuation can explode into multimillion-dollar battles. Proper valuation and documentation are critical for anyone with business assets, brand value, or royalties.
2. Prince — Dying Without a Will
Prince died intestate, leaving behind an estate worth hundreds of millions. Without a will, U.S. law required his estate to pay hefty estate taxes, and the distribution among heirs took years to resolve.
Australian Lesson:
While Australia does not have a separate “estate tax,” dying without a will can trigger unnecessary tax consequences. For example, assets may be sold to finalise administration, realising CGT unnecessarily. A well-structured will (including testamentary trusts) can minimise these outcomes and protect your beneficiaries from higher tax bills.
3. James Brown — Disputes and Delayed Charity Gifts
James Brown left much of his estate to a charitable trust, but years of family litigation delayed the distribution. In the meantime, the estate still had to address tax obligations, draining its value.
Australian Lesson:
If you plan to leave assets to charity, ensure your will and trust documents are watertight. In Australia, Deductible Gift Recipient (DGR) endorsements and careful structuring are essential to ensure tax benefits flow properly.
4. Elvis Presley — A Costly Estate Tax Bill
Elvis Presley’s estate paid out nearly 70% of its value in U.S. estate taxes, forcing the sale of assets and leaving his heirs with far less than expected.
Australian Lesson:
Australia abolished death duties decades ago, but tax risks remain. For example, superannuation death benefits tax applies if benefits are left to non-dependants. Without planning, your estate may be forced to liquidate assets to cover unexpected liabilities, just like Elvis’s.
5. Aretha Franklin — Handwritten Wills and Tax Chaos
Aretha Franklin left several handwritten wills discovered after her death. Conflicting documents meant the estate was tied up in litigation, delaying tax compliance and asset distribution.
Australian Lesson:
A handwritten or “DIY” will may be recognised in some Australian jurisdictions, but it usually creates disputes. The longer the delay in estate administration, the greater the risk of tax penalties, interest, and higher costs.
Conclusion
From Michael Jackson’s valuation battle to Elvis Presley’s tax bill, the mistakes of celebrity estates underline the importance of tax-aware estate planning. While Australia’s system differs from the U.S., our laws still impose CGT, superannuation death benefits tax, and income tax on estate earnings.
At Tax Lawyers, we help clients design wills and testamentary trusts that minimise these risks, protect beneficiaries, and avoid the chaos seen in celebrity cases.
For a list to other quirky stories relating to celebrity Wills – see stories listed on Lexscripta.
👉 If you want your estate to avoid becoming a tax nightmare, contact our Perth office on 1300-764-050 or at contact@taxlawyers.com.au for specialist advice.
