When Rock Legends Pass Away: The Possible Fates of Meat Loaf’s $40 Million Estate
June 3rd, 2022
Meat Loaf, whose real name was Michael Lee Aday, passed away earlier this year at the age of seventy-four. The singer behind 1977’s Bat Out of Hell—one of the best-selling albums of all time—experienced ups and downs befitting his larger-than-life persona. He hit bottom with his 1983 bankruptcy but rode a 1990s career rebirth to newfound financial success. The musician, actor, and producer’s net worth was estimated to be $40 million at the time of his death in January 2022. It's easy to say that Meat Loaf had a sizable estate.
There is no questioning the legacy of one of rock and roll’s biggest icons. But there are still unanswered legal questions about the fate of Meat Loaf’s estate. Many stars, including Jimi Hendrix, Aretha Franklin, Prince, and Michael Jackson all died without wills, sparking long legal battles among surviving family members. Although there is no evidence to suggest that Meat Loaf died intestate (i.e., without a will), we can speculate about his estate plan based on his life, legacy, and available legal instruments.
The Rise, Fall, and Rise Again of Meat Loaf
Meat Loaf titled his 1999 autobiography To Hell and Back. Described as a “rages-to-riches-to-rags-to riches” tale, it encapsulates a life that seemed to have few dull moments.
Many would describe Meat Loaf’s style as theatrical, and he may have been taking cues from his early career as a stage actor. Meat Loaf appeared on Broadway in Hair and The Rocky Horror Picture Show, and in the Rocky Horror film, before releasing his first album, Bat Out of Hell, in 1977.
The album became the third-best-selling album in history, but success sent Meat Loaf into a downward spiral of drugs, erratic behavior, and broken relationships. In 1983, facing dozens of lawsuits from his musical partner, Jim Steinman, over song rights, Meat Loaf filed for personal bankruptcy.
From there, Meat Loaf slowly ascended once again to the top of the entertainment world. He reconciled with Steinman, and the two collaborated on the successful comeback album, Bat Out of Hell II. By the time of his death, Meat Loaf had appeared in hundreds of TV shows, endeared himself to a younger generation of fans thanks to his movie roles in Wayne’s World and Fight Club, married twice, and had two children.
Although Meat Loaf’s $40 million net worth is relatively small compared to the richest celebrities in the world, it is still a considerable inheritance to leave behind. Presumably, his fortune will go to his second wife, Deborah, and his two daughters from his first marriage, Pearl and Amanda.
Meat Loaf adopted Pearl when she was a young child. Pearl’s half sister, Amanda, is six years younger than Pearl. Because Meat Loaf was known for giving money to charities, he may also have included charitable giving in his estate plan—assuming he had one.
McCreary Law Office hopes that Meat Loaf did have a plan in place, and that at a minimum, it addresses the following issues.
Estate Tax and the Lifetime Exemption
While most people do not have to worry about the federal estate tax, it can come into play for high-net-worth individuals like Meat Loaf if they fail to take measures to avoid it by thoughtful estate planning.
In general, the estate of an individual who dies in 2022 is not subject to the estate tax if their estate is worth less than $12.06 million. The amount of the lifetime gift tax exemption is tied directly to the estate tax. By giving away gifts over the course of their lifetime, a taxpayer can reduce the value of their estate at their death and avoid or reduce the estate tax, but certain gifts also reduce the taxpayer’s remaining estate tax exemption at death. However, a married couple can combine their exemption amounts because the first spouse’s remaining estate tax exemption can be “ported over” or transferred for the surviving spouse to use during their lifetime or at their death.
An estate worth $40 million, such as Meat Loaf’s, will owe estate tax. However, there are ways to avoid or defer paying the tax. One way would be to use the unlimited marital deduction to leave everything to his wife. This option allows someone to transfer all of their assets (accounts and property) to their US-citizen spouse at any time—including at the time of their death—without incurring gift or estate tax.
Using a bypass trust is another way to avoid the estate tax. In this case, Meat Loaf could have created a trust to hold an amount equal to his unused individual lifetime exclusion amount ($12.06 million), with any excess passing to his wife either outright or through a marital trust, therefore bypassing estate tax liability. Meat Loaf’s wife would probably be a beneficiary of the bypass trust, so this approach is just a variation of leaving everything to her. Though this structure is more restrictive than a 100 percent outright distribution, it can offer some creditor and asset protection benefits.
Adopted Children and Children with Different Needs
Under the law, adopted children are treated the same as natural-born children. Most parents of adopted children agree with this stance, and there is no indication that Meat Loaf would have wanted to depart from it.
Some parents, though, treat their children differently in their estate plan, not because they do not care for them equally but because the children have different needs. Such differences can be reflected in the estate plan.
For example, Meat Loaf’s daughter Pearl is married to a member of the band Anthrax. In fact, Pearl is a musician herself. Not only does she have her own band, she also toured with her father for several years. It is a good guess that, between herself and her husband, Pearl is already financially well-off and not dependent on her father’s inheritance.
Her sister, Amanda, an actress who has appeared in popular TV shows and movies, is probably not hurting for money either. But if one sister was financially successful and the other was not, Meat Loaf might have made a provision in his estate plan that directed a larger share of his assets to the child with greater financial needs.
Blended families can prove challenging in both life and death. Someone with children from a previous marriage might have to balance wanting to provide for their children and for their spouse. Specifically, there might be concerns that if all the money were left to the current spouse, who is not the parent of children from a previous marriage, the spouse might not feel obligated to take care of those children.
For someone like Meat Loaf who may have been in this situation (there is no evidence that he was; this is just to provide an example), a qualified terminable interest property (QTIP) trust might be a solution. A QTIP trust can be structured in such a way that Meat Loaf’s wife would receive income from the trust property throughout her life, but when she passed away, the remainder of the trust assets would go to Amanda and Pearl, and his wife would be prevented from excluding them. In other words, if Meat Loaf had set up a QTIP trust, the funds would be distributed according to his wishes; his wife could not control the disposition of the remaining funds at her death.
Instead of setting up a single or “pot” trust for multiple beneficiaries, Meat Loaf could have chosen instead to establish multiple trusts that took immediate effect at the time of his death. Such separate subtrusts, or testamentary trusts, can be created for separate family members to simultaneously meet their individual needs.
There is some evidence that Meat Loaf used trusts, so he may have created living trusts that distributed assets during his lifetime. Variety reports that Meat Loaf and his wife held at least two homes in the same trust. It could be that when Meat Loaf died, the property in this joint trust became his wife’s exclusive property.
Meat Loaf’s Plans Could Remain Private
The fate of Meat Loaf’s estate may be revealed in time. If the estate has to go through probate (for example, if Meat Loaf still owned assets in his individual name instead of in a trust, with no beneficiary designation, or if he used a will-based estate plan with no trusts), the probate records will become public. But if Meat Loaf properly funded and used trusts to his advantage, the details of his plan are unlikely to enter the public record, and we may never know what became of his $40 million fortune.
If he did not have an estate plan, state intestacy law would apply. Meat Loaf owned homes in multiple states, including California, Tennessee, and Texas, but it appears that he died as a resident of Tennessee. This means that a Tennessee probate court would oversee the domiciliary proceeding while California and Texas would have jurisdiction over the real estate subject to any ancillary proceedings there. In addition, the laws of the state where real estate is physically located typically govern what happens to that property when the owner dies, possibly resulting in different dispositions of property in certain circumstances.
Though intestacy laws are intended to accomplish what a state assumes the decedent would want, dying intestate is often a worst-case scenario because the decedent effectively loses all control over the details of their legacy. But it is not just celebrities who require an estate plan. Everybody should have, at the least, a basic will that outlines which assets go to whom. Beyond that, there are many ways to divide assets among trusts. Through savvy estate planning, individuals of any net worth can take control of their legacy, avoid estate taxes, and provide for loved ones long after they are gone.
For help and guidance designing your estate plan, please reach out to McCreary Law Office and schedule an appointment. (And if you ask, Jana will tell you which Meat Loaf song she's been known to sing Karaoke.)