Insurance - Review Annually

DID YOU KNOW that insurance is a very important part of the estate planning process. I was reviewing (something everyone should do once a year) our insurance policies to update the beneficiary designations. It just reminded me how insurance helps pay off debts so your family can continue to enjoy their assets whether a home, a car or vacation property. It also provides money to families devastated by a death. It can even address the debt of business ventures.

AND WHAT THAT MEANS your estate (not your family) is responsible for paying off ALL debts before ANY distribution is made to a loved one. You do not want your estate to be bankrupt by your debts, business or personal.

SO MAKE SURE in your buisness affairs and personal affairs, you plan for incapacity and death because your debts do not go away just because you do!!!

Leave your comments here or contact us at http://www.ythlaw.com/

Your Estate and Business Succession Planning

Well, yesterday's Memorial Service for Michael Jackson was extraordinary and a real tribute to his legacy.

I had a question posed to me. What effect will the cancellation of Michael Jackson's "This is it" Tour have on his estate? Of course, I do not know the terms of any agreement which may have been put in place but there are a number of conditions that may or should have been considered. I will discuss a few here.

FIRST, the promoters of the concerts, AEG Live, would have taken out INSURANCE on the Pop Star. They reported to the press that Michael Jackson had passed the insurance company's physical exam. He would have been insurable. How much insurance did they have on Michael Jackson and under what condition and terms would coverage be paid out? Only time will answer those questions.

SECOND, there would have been an AGREEMENT to cover all kinds of contingencies like death, disability, sickness, etc. If as reported, the promoters spent $30 million dollars in preparation and made $85 million dollars in tickets sale, in theory they might be out $115 million dollars. However, it has also been reported that 40% to 50% of the ticket holders may opt to keep the ticket as a souvenir reducing the promoter's exposure to approximately $73 million. Further reduction will occur if the agreement provided the promoter with rights to the musical footage of the rehearsal. The small footage already released has received record attention.

FINALLY, in business you must consider the effect of your actions on your estate. What happens if you die? If Michael Jackson worked with an estate planning team and professional advisors, the cancellation of the concept tour may have no negative effect on his estate. Let us see.

An interesting question that we can all watch unfold. Leave your comments here or contact us at www.ythlaw.com