Carefully consider beneficiary designations; they have a significant impact on the distribution of your estate.

Most financial advisors specializing in estate planning, suggest using a will or trust to formally outline the final distribution of assets held within one’s estate.  However, these documents, unless specifically named as the beneficiary, usually do not have any effect on the distribution of many important assets.  Personal assets such as IRAs, annuities, life insurance, retirement plans, employee benefit plans, and transfer on death accounts use beneficiary designations to control which entity receives these assets.  Financial advisors can help you decide on which beneficiary designations are best for you.   These can include people, charitable & educational organizations and religious entities among others. Also, most financial advisors highly recommend naming back-up beneficiaries; commonly called “Contingent Beneficiaries”. If a primary beneficiary dies before you the contingent beneficiary will receive its share of the asset.

Most financial advisors suggest making it a habit to review beneficiary designations regularly and update them as necessary for employment changes, birth, death, marriage and divorce. 

Many of our advisors are members of the Financial Planning Association (FPA) and also the National Association of Personal Financial Advisors (NAPFA: the nation’s leading organization promoting Fee-Only comprehensive financial planning).

Using the services of a qualified financial advisor (to help you identify the strengths and weaknesses in your financial picture) will ensure you can retire comfortably!

NOTE: Experts recommend contacting 2-3 financial advisory firms, so that one may compare/contrast each firm, thus making the best-qualified choice.

Only if the estate can pay the tax bill! 

Financial Planning is essential.  It’s never too late to correct your errors or put an estate plan in place, if you have neglected to do so up to this point. 

Early this week the judge presiding over Michael Jackson’s estate ruled in favor of the co-executors listed in Jackson’s 2002 will. Mr. John Branca, a renowned music attorney and Mr. John McClain, a music executive will now take control of the Jackson estate. Together, with a team of legal advisors, they will orchestrate strategies to assess opportunities embedded within Jackson’s assets including real property, music, video and publishing rights. Overall, the estate value could increase significantly as people want to remember Jackson’s legacy similar to Elvis Presely’s estate.  Could Neverland become the next Graceland?  Should Jackson have had better comprehensive financial planners?  or a single high-quality financial advisor?

Now, the co-executors are facing an estimated $80 million dollar federal estate tax bill due within nine months from the date of death. Unfortunately, most of Jackson’s estimated $236 million estate, as reported by The Associated Press March 2007, assets are relatively illiquid and difficult to value. Until a final valuation and liquidity solutions are in place the executors are expected to request a tax payment extension from the IRS.  In special cases, estate tax can be spread out for a period up to 14 years.

This scenario sets itself up to have assets with significant intrinsic value to be sold off at discount prices. Remember to visit with your favorite investment advisor to ensure your estate has liquidity strategies in place to comfortably settle your estate.

Search: Financial Advisors with a specialization in Estate Planning.

Michael Jackson’s Estate Issues:

Michael Jackson’s estate was not kept up to date.

Indeed, Michael Jackson’s estate plan included a will in conjunction with a family trust. Unfortunately, Jackson’s will is missing vital information, beneficiary designations!

This omission temporarily disqualifies the originally appointed administrator and executors from exercising their powers to privately settle the estate. As a result, the estate now must be exposed to the California probate system; it will determine who gets control over the estate and make many of the proceedings public record.

Currently, Mrs. Katherine Jackson, Michael Jackson’s mother, is the administrator of the estate.  She will likely be succeeded by two of Michael Jackson’s former business colleagues, an attorney and a recording label executive. Michael appointed them as his executors when he established the estate plan in 2002. These individuals are interested to gain immediate control over the estate for business purposes. You can see how the viewpoints of a mother mourning the loss of her son could differ from two businessmen awaiting to take control of her son’s estate.

Estates with multiple administrators and/or executors who have differing agendas can become very difficult to settle, expensive and emotionally taxing.

This is a great example of how important it is to keep an estate plan updated.  Additionally, be very careful and ask lots of questions before deciding who will handle your affairs.  Don’t let your estate become a “Thriller”. 

Who will have control after you are gone?

Find: Financial Advisors with Estate Planning expertise.