The Estate Tax Fundamentals of Celebrity and Control

Abstract:     
We previously suggested that post-death publicity rights could be excluded from the decedent's estate for tax purposes if state legislation precluded the decedent from exercising post-death control. In other words, if state legislation designated who would hold these rights after the decedent's death, the value of these rights should not be subject to estate tax. Professor Joshua Tate, in his response to our essay, argues that under current law, estate tax inclusion would be required regardless of the decedent's ability to exercise control. So, for example, in Professor Tate's analysis, the estate tax would apply even if the legislation vested those rights in the decedent's oldest daughter and even if the decedent had no right to alter this outcome. Professor Tate's analysis misconstrues fundamental estate tax principles and misunderstands the precedents on which he relies. Post-death control is an essential prerequisite for estate tax inclusion under Section 2033. In its absence, as a general rule, the section cannot apply. In suggesting that publicity rights are somehow not subject to this requirement, Professor Tate misreads the significance of case law and ignores well engrained principles of tax law.

Keywords: estate, estate tax, tax, postmortem, publicity, celebrity, Monroe

JEL Classifications: K34, K11

Accepted Paper Series