Cover Story: The Battle Over Michael's Children

Behind the black wrought iron gates of the Jackson family mansion in Encino, Calif., Michael Jackson’s three children spend their days playing with their cousins and their pets and watching movies — but no news reports — as they adjust to life without their famous father.

Their grandmother Katherine Jackson tends to their needs and offers a calming presence. “His kids are strong,” says Michael’s brother Jermaine Jackson. “They have a lot of love and care.”

That serene life may soon disappear. The children — 12-year-old Michael Joseph Jr., aka “Prince”; Paris-Michael Katherine, 11; and 7-year-old Prince Michael Jackson II (also called “Blanket”) — are pawns in what could shape up to be an intense custody battle between Katherine and Debbie Rowe, the biological mother of the two oldest children.

“Debbie believes Katherine has a good heart, but the life they would live with the Jacksons is unthinkable,” an insider tells OK!. “They belong away from the media circus. Kids need fresh air and freedom. They can’t get that at the mansion in Encino.”

But Debbie may soon have to decide between her kids or cash. “She’s likely to walk away with a lump sum of money if she agrees not to seek custody,” a friend of Debbie tells OK!. “She will probably end up with $100 million. It would be worth paying out, from the Jackson family’s point of view, to prevent a tug-of-war for the children.”

However others point at the discrepancies regarding how much MJ's estate is worth, anywhere between $200 million and $500 million, including Attorney Larry Heller, a tax, probate and estate expert, who says that while “Debbie Rowe has some leverage as to the amount” she could receive in a settlement, “I wouldn’t be comfortable saying she could get quite that much. She could get several million dollars.”

On July 2, Debbie came out swinging in her battle for custody, telling KNBC Los Angeles reporter Chuck Henry, “I want my children,” and offering to submit to DNA tests to prove she was their mother. But her attorney, Eric George, later said she hadn’t reached a final decision on what to do in court.

Meanwhile, a court granted temporary custody to Katherine, 79. In Michael’s will, he asked that she be named the guardian — and if she was not able, singer Diana Ross, 65, should gain custody; he left no provision for Debbie to care for the children. “The fact that he left her out says loud and clear that he wanted her to get nothing,” says L.A. attorney Michael G. Dave, who specializes in family law.

A custody hearing is set for July 13, and the potential battle is already turning nasty. Michael’s sister Janet Jackson believes it’s “disgusting to use the kids for money,” a family insider tells OK!.

Janet, 43, has reassured Michael’s children that they won’t be lost in the commotion that has surrounded the family since her brother died. “She told them if they need her for any reason, even just to talk or if they want pizza, to call her immediately.”

This isn't the first time custody of the kids has come up: In their 1999 divorce agreement, Debbie signed away her parental rights in exchange for an $8.5 million settlement. But when a teenage boy accused Michael of sexual abuse in 2003, she applied for custody again, even though she admitted she had not seen the children in years. In 2006, Debbie allegedly made another deal with Michael to relinquish rights to the children in exchange for cash.

While custody questions continue, the L.A. County Department of Children and Family Services is investigating the welfare of the Jackson kids, prompted by reports of Michael’s drug use. It will also assess conditions at Katherine’s home. The report is expected to take a month to complete, but Jermaine says it’s obvious the children belong with Katherine: “The will is what it is,” he says. “This is what Michael wanted.”

For more on the custody battle between Debbie Rowe and the Jackson family, pick up the new issue of OK! — on sale everywhere Thursday!