Michael Jackson Estate Faces $17.5 Million Insurance Fight

Michael Jackson Estate Faces $17.5 Million Insurance Fight

Legal controversy has surrounded the Michael Jackson Estate ever since he died almost two years ago. Trial & Heirs did a year in review article last year; it’s almost time for year two. You can now add a new lawsuit — over $17.5 million worth of insurance — to the list. Michael Jackson Estate

Concert promoter AEG Live took out the large insurance policy over Michael Jackson in case he died and was unable to perform the “This Is It” concert tour. Of course, that’s exactly what happened, showing that AEG was smart to take that precaution. Reportedly, AEG spent some $20 to $25 million on the tour before the King of Pop’s death, and this insurance was supposed to protect that investment. Both AEG and a Michael Jackson limited liability company that is controlled by the Estate were named as beneficiaries eligible to collect that money under the policy.

Michael Jackson Estate Insurance Claim Update

But, AEG and the Estate haven’t collected this money yet … and both are now embroiled in a new lawsuit by insurer Lloyd’s of London. The renowned insurance company sued, asking a California judge to rule that the policy should be voided. They don’t want to pay the $17.5 million.

Why the lawsuit? Lloyd’s says that AEG and Michael Jackson both lied during the insurance process. Reportedly, they didn’t tell about Jackson’s use of prescription drugs … namely, the propofol which killed him. The insurance company also says that Michael Jackson’s medical history, including the doctors he saw, weren’t properly disclosed.

The legal term for this type of insurance denial is “material misrepresentation.” If Michael Jackson or AEG gave false information on the insurance application or otherwise during the process of obtaining the policy, then the law permits the insurance company to avoid having to pay … but, only if the false or missing information is “material.” In other words, generally speaking, the “misrepresentation” must be held to be relevant to the insurance policy and cause of death for this to be a proper basis to deny a claim.

The insurance company would normally put Michael through a lengthy medical evaluation, as would be customary for any insurance policy like this — especially one this large. This evaluation usually includes review of medical records, which raises the question of whether the insurance company should have discovered any misstatements. If so, their failure to do so could mean the fault lies with them, not MJ or AEG.

This means that either someone really tried hard to hide the truth of Michael’s prescription drug use, or Lloyd’s of London didn’t do a very good job of investigating the policy.

The truth will now play out in court. Reportedly, the two sides have been trying to settle the claim ever since the King of Pop died, but it hasn’t worked. So now they have to resolve it through litigation.

The Estate is ready to battle. Michael Jackson Estate attorney Howard Weitzman says that the insurance claim is legitimate and the insurance company is merely trying to avoid paying out what it should.

This type of fight is not uncommon, but most of the time it happens over life insurance. Life insurance is an important plan of any good estate plan. When that plan falls apart because a life insurance claim is denied, families should work with an experienced attorney who has handled denied claims. Insurance companies often deny claims they should pay, and it may take a court fight to get the money that a family is legitimately owed.

In these cases, an important factor is the two-year “incontestability period.” If someone has a material misrepresentation, but more than two years pass after the application and the date of death, then the insurance company still has to pay. That rule wouldn’t help MJ’s estate or AEG though, since the policy wasn’t two years old when he died.

Will this money be lost due to improper disclosures by Michael Jackson and the concert promoters? We’ll have to stay tuned to find out.

By Danielle and Andy Mayoras, co-authors of Trial & Heirs: Famous Fortune Fights!, husband-and-wife legacy expert attorneys, and hosts of an upcoming national PBS special. The charismatic duo has appeared on the Rachael Ray Show, Forbes, ABC’s Live Well Network, WGN-TV and has lent their expertise and analysis to hundreds of media sources, including The Associated Press, Los Angeles Times, Chicago Tribune, Kiplinger, and The Washington Post, among many others. As dynamic keynote speakers, Danielle and Andy delight audiences nationwide with highly entertaining and informative presentations, dishing the dirt on celebrity estate battles while dispensing important legal information to help people avoid family fights among their heirs. The couple spends their free time with their 8-year old son and seven-year old boy/girl twins.

For the latest celebrity and high-profile cases, with tips to protect yourself, your loved ones, and your clients, subscribe to The Legacy Update at www.TrialandHeirs.com.

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  • Andjusticeforsome

    “This means that either someone really tried hard to hide the truth of Michael’s prescription drug use, or Lloyd’s of London didn’t do a very good job of investigating the policy.”

    According to Dr. Murray, Jackson’s physician at the time of death, propofol had only been administered for six weeks.  The insurance policy from Lloyd’s was taken out months before that, and the medical exam was done in April, 2009.  Therefore, your statement above is inaccurate, as Jackson was not using propofol at the time the policy was taken out or at the time of the medical exam.

    The autopsy report on Jackson states that cause of death is acute propofol intoxication with a benzodiapine effect.  There were NO other drugs found in Jackson’s system.  In addition, the LA coroner did not list damage to any of Jackson’s organs; a classic sign of chronic drug use. 

    Lloyd’s of London is merely trying to avoid having to pay their $17.5 million obligation.  No doubt, after the Estate attorneys, along with AEG’s attorneys, go head up with Lloyd’s of London, Lloyd’s will grudgingly pay the claim. 

  • Andjusticeforsome

    “This means that either someone really tried hard to hide the truth of Michael’s prescription drug use, or Lloyd’s of London didn’t do a very good job of investigating the policy.”

    According to Dr. Murray, Jackson’s physician at the time of death, propofol had only been administered for six weeks.  The insurance policy from Lloyd’s was taken out months before that, and the medical exam was done in April, 2009.  Therefore, your statement above is inaccurate, as Jackson was not using propofol at the time the policy was taken out or at the time of the medical exam.

    The autopsy report on Jackson states that cause of death is acute propofol intoxication with a benzodiapine effect.  There were NO other drugs found in Jackson’s system.  In addition, the LA coroner did not list damage to any of Jackson’s organs; a classic sign of chronic drug use. 

    Lloyd’s of London is merely trying to avoid having to pay their $17.5 million obligation.  No doubt, after the Estate attorneys, along with AEG’s attorneys, go head up with Lloyd’s of London, Lloyd’s will grudgingly pay the claim. 

  • Aimiayunni

    ilovemickhaeljacksen<3

  • Aimiayunni

    ilovemickhaeljacksen<3