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When it comes to estate planning in contemplation of that journey everyone must take, it is as important to think about estate administration which will occur after you have gone. Determining where your assets will go and on what terms is not the only consideration that needs to be made. Especially for wealthier individuals, the estate does not simply get divided after your death. Estates often continue earning profit for the advantage of the beneficiaries, and that requires management.
The executors of Michael Jackson’s estate recently asked for and received an increase in their “paycheck” after turning the once bankrupt estate into a profitable multi-million dollar one. Although the increase comes directly out of the income made by the estate, the beneficiaries were more than willing to agree. Without the successful management, the estate would have been worth almost nothing.
The request was made in front of a court judge where the executors argued that the management of the estate required more effort and resources than originally anticipated when the pay structure was agreed upon in February of 2010. The original structure provided a percentage of the entertainment-related earnings to be paid to the executors with several income generating projects excluded from the income calculation.
Executors not only properly managed the investments already in place, but expanded to new lucrative projects. The executors have also worked hard to eliminate the outstanding claims creditors had on the estate. The debts once added up to about $400 million, but the estate now lists approximately $90 million in cash on hand.