Monthly Archives: October 2016

Are you missing out on unclaimed billions?

Have you told your family if you have a life insurance policy? Do they know where to find the paperwork needed to claim its benefits after you die?

Many people take out a policy, stick the paperwork in a drawer somewhere and then forget about it. They don’t tell anyone the policy exists or who the beneficiaries are. When they die, their policy goes unclaimed.

The amount of unclaimed benefits is enormous – $7.4 billion in this country alone. According to the Florida Office of Insurance regulation, that’s the amount major life insurance companies have agreed to pay out, but haven’t.

Of that amount, $5 billion will go directly to beneficiaries they find; the balance will go to states whose unclaimed property departments will search for and pay beneficiaries.

Florida began investigating the life insurance industry in 2009 and there are now 41 states involved in the effort. It was concluded that insurers weren’t doing enough to pay out on life insurance policies where insured people had died but the beneficiaries hadn’t filed claims.

The life insurance companies weren’t quick to pay out benefits but they were very quick to stop making payments when annuity owners died. They used the Social Security Administration’s Death Master File to identify customers who had been collecting annuity payments and immediately stopped sending money to them but did not use the same file to identify life insurance policy holders who had died and whose beneficiaries should have received benefits.

To date, 25 life insurance companies have made settlement agreements and others are still being investigated.

The industry now supports a national standard that requires life insurers to use new technologies to identify policy holders who have died and their beneficiaries who have not yet filed claims. Twenty states have enacted laws based on this standard.

Granted, insurance companies have paid out $600 billion to beneficiaries who have filed claims in the past ten years. However, $7.4 billion is not just pocket change.

How can you find out whether you’re a beneficiary of a forgotten or unknown life insurance policy.? In addition to checking thru the deceased’s records and storage areas, here are a few things you can try:

Check bank statements of the deceased to see whether any payments were made to life insurance companies.
Look through tax returns to see whether any interest income from life insurers was reported.
Go through address books for names of insurance agents or financial advisors; contact them to see whether they have any information about policies that were taken out.
Check with former employers and professional organizations to see whether they had issued any policies.
Search the MIB Group, Inc. database. They provide a data sharing service for life and health insurance companies and offer a policy locator service for consumers. For a cost of $75, they will search for policies taken out since 1996 from one of their 420 U.S. and Canadian member companies.
Check state unclaimed property offices. You can also conduct a multi-state search on MissingMoney.com.

The best thing to do is to avoid this problem in the first place and tell your beneficiaries or, at the very least, your attorney or the person who will be your executor that you have taken out a life insurance policy. Don’t let the insurance companies keep money that should be in your family’s hands.

For more information about estate planning and end of life issues, go to www.diesmart.com.

Do celebrities make money after they die?

In one word “yes”. Following is the article recently released by Forbes that lists the highest paid celebrities who died this year.

While the Pearly Gates seemed to welcome an unusual amount of celebrities in the past year (David Bowie, Prince and Arnold Palmer, to name just three), the long-departed King of Pop had the time of his afterlife.

The March sale of Michael Jackson’s half of the Sony/ATV music publishing catalog, famous for its library of Beatles tunes, for $750 million puts him at the top of our annual ranking of the top-earning dead celebrities, an ironic finish given that many critics and even advisors once derided the catalog as a badly overpriced investment. Jackson’s total pretax payday of $825 million ranks as the biggest annual haul by any celeb dead or alive.

“He was always doing stuff that was the best, the greatest, the biggest,” says Jeff Jampol, who manages the estates of Janis Joplin, Jim Morrison and others. “That was a big fight when he wanted to buy that catalog … it turned out to be one of the greatest investments ever.”

In 1985, Jackson paid $47.5 million ($140 million in 2016 dollars) to buy the Beatles-packed ATV publishing catalog. Ten years later, Sony paid him $115 million to form a 50/50 joint venture, then purchased his remaining half in March. In all, the sales (and accompanying distributions) gave Jackson’s estate, which is overseen by lawyer John Branca and music exec John McClain, a 30% annualized return on investment.

Peanuts creator Charles Schulz claims the second spot with $48 million. The cartoonist died of colon cancer 16 years ago, but lives on through the franchise—and its licensing revenue, boosted by last year’s well-received 3-D Peanuts movie. Golf legend Arnold Palmer rounds out the top three with earnings of $40 million, most of which was accumulated in the mortal realm, as he passed away just days before our cutoff.

Our set of 13 Halloween-spooky estimates are for pretax income from October 1, 2015, through October 1, 2016, before deducting expenses for agents, managers and lawyers. Sources include Nielsen SoundScan, Nielsen BookScan, PollstarPro, IMDB and interviews with estate experts.

Michael Jackson: The King Of Pop–and celeb earnings–dead or alive (Photo: Mike Powell /Allsport).

Recently deceased superstars Prince and David Bowie also rank high on the list. The Purple One passed away while still at the top of his touring game (grossing nearly $2 million per show) and sold more than 2.5 million albums over the past year, more than any other dead musician. Bowie, meanwhile, released his final album, Blackstar, just two days before his death; the ensuing sales spike helped him outsell Jackson and Elvis Presley (No. 4, $27 million) in the last year.

Presley’s total represents a 50% drop from last year’s figure (a change in how we accounted for Graceland ticket sales, not plummeting demand, accounts for the change). The King of Rock n’ Roll still moved more than 1 million albums on the year—most of them physical, not digital—remarkable for someone who’s been gone for nearly 40 years.

As for Jackson, the Sony/ATV payday gives him the last laugh over doubters. But a decade ago, he already knew what a good deal he’d made, as detailed in my book Michael Jackson, Inc. On a 2007 conference call, the King of Pop reminded Sony/ATV chief Marty Bandier of the acumen that had earned him a nine-figure return on paper by that point.

“See,” he told Bandier. “I told you I knew the music publishing business.”

13. Elizabeth Taylor ($8 million)
12. Steve McQueen ($9 million)
11. David Bowie ($10.5 million)
10. Bettie Page ($11 million)
9. Albert Einstein ($11.5 million)
8. John Lennon ($12 million)
7. Theodor “Dr. Seuss” Geisel ($20 million)
6. Bob Marley ($21 million)
5. Prince ($25 million)
4. Elvis Presley ($27 million)
3. Arnold Palmer ($40 million)
2. Charles Schulz ($48 million)
1. Michael Jackson ($825 million)

You may not be a celebrity and you may not have an estate worth millions of dollars but you still need to do some planning for what you want to have happen to the assets you do have. For more information about this topic, check our our website www.diesmart.com.

Prince’s Urn – Totally Unique

This past week, People Magazine revealed the first photos of Prince’s urn, one that is a totally unique as the man was himself.

While alive, Paisley Park in Minnesota was Prince’s home; as of last Thursday, it became a museum and memorial to him. At that museum, his ashes are on display in a one of a kind urn that was designed by his sister, Tyka Nelson and his nephew President Nelson. They partnered with Foreverence, a company that developed a scale model of Paisley Park itself. It’s 14 x 18 inches and decorated with Prince’s famous symbol in his signature purple.

His ashes are sealed in the front column and, though it can’t be seen by the public, the facade “opens to reveal a miniature replica of Paisley Park’s grand atrium, including the singer’s signature purple Yamaha piano, white ornamental doves and decorative tile floor. The interior even includes real working lights.”

According to its website, Foreverence designs urns and memorials that “celebrate life, passion, and legacy”. They’re “a timeless tribute as unique as the life it represents.” They certainly managed that for Prince.

You may not want such a unique resting place but you may want information about options that are available to you. To find out more, go to www.diesmart.com.

6 ways to foil hackers, phishers and pushy marketers

I’ve written a lot in the past about identity theft and the importance of protecting your online accounts. These six points were contained in an email from my mortgage broker and I think they definitely are worth repeating.

1. Update software. The latest computer, smartphone and apps software is the most secure. Update now and choose ‘Update Automatically’ in Settings. Update your WiFi router on its app or Web setup page.

2. Strengthen passwords. Make them long strings of random upper and lower case letters, numbers and symbols. Use a different one for every site. Turn on two-factor authentication for Apple ID, Google, Facebook (‘login approvals’), Microsoft, Twitter (‘login verification’) and banks. Use a password manager to sync devices.

3. Encrypt data. Makes it hard for someone to access information if they get your device. Encrypt with a password or fingerprint screen lock, or turn on ‘encryption’ in Settings. Use Disk Utility on external drives.

4. Privatize browsers. Select ‘clear browsing data.’ (This deletes passwords which shouldn’t be saved on sites anyway.) Activate ‘Do Not Track’ in Settings. Block trackers with an extension (Ghostery, Disconnect, EFF’s Privacy Badger). Opt out of ad tracking at http://www.aboutads.info/choices/

5. Check apps. Find out which ones access locations and data and turn off if not used. Check Settings for Privacy permissions. Check Google and Facebook security. Delete Facebook apps you don’t want.

6. Think! Don’t click on email links or attachments you don’t expect. Make online payments only on secure “https” sites. Double-check public hotspot names, or use a VPN—HotSpot Shield (Windows, Android), Cloak (iPhone, Mac). Use PayPal on unfamiliar sites. Don’t pay online with debit cards or put account info in emails.

For more information about protecting your digital assets, go to www.diesmart.com.

My father left his home to his kids — my stepmother sold it for $1 million

We read this recent column from MarketWatch and found it interesting enough that we are repeating it in its entirety. If you have step children or step parents, you should be aware of what might happen if proper planning isn’t done.

He made his wishes clear, but his second wife had other ideas

Dear Moneyologist,

My brothers and I are mentioned in our father’s will as what he “wishes to happen” with the house he purchased for his second wife. He put the house in her name, but stated that if he should die first, he would like the wife to live in the house till she dies, but wanted the house to be sold and the proceeds to be split among his children.

After he died, my stepmother has sold the house for $1 million. She bought a new house for $500,000 and kept the difference. She has not put all the children on the ownership of the new house. Also, she has children from her first marriage who might want a percentage of the estate, including the new house. The will was made in Taiwan. I live in Texas.

Where do I and my brothers stand in this situation?

Betrayed Daughter

Dear Daughter,

When it comes to family drama, stepmothers fare about as well as mothers-in-law. That is, they get a hard time. Sometimes, it’s deserved, other times I think they fall victim to negative stereotypes. In one case, the stepmother wanted to cut her husband’s children out of his life insurance policy. And another stepmother obsessed over her husband’s children and what might happen to his credit score should he die. It’s easy to come down hard on stepmothers, mostly because of Grimm Fairytales. This 2009 book “Stepmonster: A New Look at Why Real Stepmothers Think, Feel, and Act the Way We Do” tries to debunk that myth. On this occasion, the jury is out.

Your father can’t leave his children something that he no longer owns. That’s not how life or the law works.

Your stepmother has downsized and created a nice nest egg. That was her prerogative. Your father can’t leave his children something that he no longer owns. He put his house in your stepmother’s name and, judging by his will, it seems that he wanted her to give it back. That’s not how life or the law works. If you could prove undue influence, you might have a case. You would need to provide evidence that (a) your father was not of sound mind when he signed over the house and/or (b) your stepmother somehow did not have his best interests at heart and tricked him into signing over the home. That would be an expensive and difficult process.

It’s still unclear whether U.S. or Taiwanese law would apply here. According to Taiwanese law, “The making and effect of a will are governed by the national law of the testator [your father, in this case] at the time of the making of the will.” But that may prove fruitless. “If you can prove that the testator was the true owner, you can file a litigation against your father’s second wife,” says Ou Yang, Hung, managing attorney at Brain Trust International Law Firm in Taipei, Taiwan and adjunct assistant professor of law at Soochow University. “It will be very hard to prove that the testator was the true owner of the house.”

Put it in simpler terms: You may have to kiss that $1 million goodbye.

For information about estate planning, check out our website www.diesmart.com.