Mick Jagger is known for being the swaggering lead singer of one of the world’s most famous rock bands. (Beatles and Rolling Stones fans, argue amongst yourselves about who is number one!) But he’s also been involved in some tragic and strange estate disputes. Back in 2014, Jagger’s longtime girlfriend, the fashion designer L’Wren Scott, committed suicide. The tragedy happened just weeks before the Rolling Stones were headed out on tour. Obviously, the band needed to postpone their tour since Jagger had lost his partner.
At that stage of the band’s career, the Rolling Stones had become a big corporation with a lot of moving parts. As a result, they actually had a tour-cancellation insurance policy that was supposed to apply to this exact situation. The band filed a lawsuit against several insurance underwriters who were affiliated with Lloyds of London seeking to collect on the policy.
As it turns out, the policy-protected against cancellation in the event that any of the listed persons on the policy suffered an untimely death. The band members were listed and so were their loved ones, including Scott. The policy was supposed to pay over $12.6 million dollars. But the underwriters denied the claim on the grounds that Scott “intended to, and did, commit suicide, and her death was therefore not ‘sudden and unforeseen.” The company also challenged Scott’s mental health, suggesting, that she was already very ill and suicidal, which could invalidate the policy. The insurance company made all of these allegations public, enraging the Rolling Stones, Mick Jagger, and Scott’s grieving family.
Insurance matters are normally private matters, but they can spill into the public record whenever there is a dispute. That’s one of the reasons that most people try to shield sensitive matters by using private trusts. Scott left her entire estate, valued at around $9 million, to Jagger. This caused some hard feelings for her family, who didn’t think that Jagger really needed the extra cash.
Why Bother With Life Insurance?
Although the Rolling Stones policy wasn’t strictly a life insurance policy, the dispute does illustrate the pluses and minuses of using life insurance.
Life insurance provides monetary benefits to beneficiaries upon the death of the insured person. The main reason people buy life insurance is to give financial support to someone else if the insured dies. For example, insurance proceeds can help replace lost income if a person passes away unexpectedly. This is especially important if the person was the main breadwinner in a household.
Life insurance benefits are also helpful to pay off debts the person left when they passed away. The beneficiaries can use insurance money to pay off car loans, mortgages, credit card debts, or other outstanding financial obligations.
Funeral expenses are often unexpectedly high. One way to ameliorate this is to have an insurance policy that pays a funeral home for all the funeral-related expenditures. That saves the surviving family from having to tap into their savings during a very difficult time.
Some people buy life insurance as a way to leave an inheritance for their family or favorite charities. Others use it to leave money to support their surviving children, siblings, or elderly parents.
Pros of Having Life Insurance
Life insurance death benefits aren’t the same as assets distributed from a person’s will. A will goes through the probate process, which means it is filed with a court. A will instructs the court on how to distribute the deceased person’s money, property, and other assets.
In contrast, life insurance death benefits are paid out directly to the beneficiaries named on the policy. This doesn’t go through probate, which theoretically means that the money is typically available to the beneficiaries faster than assets that are passed through a will.
Life insurance death benefits are generally not subject to income tax, which again makes it possible to give immediate financial support to beneficiaries with little to no red tape.
You can make any person or entity your beneficiary, whereas if you die without a will, the state determines your heirs.
Your policy and its beneficiaries are usually private, unless there is litigation.
Cons of Having Life Insurance
But life insurance is still not a substitute for a will. There are some drawbacks to life insurance. For starters, most insurance companies won’t let you name an underage child as a beneficiary. If you want to leave money to your children, you will have to leave it to an adult. If you’re most concerned with providing for minor children, it may be better to use FastWill to create a trust.
Life insurance beneficiaries can use the money any way they want. This might be fine with you. However, if you prefer to have some say in how your beneficiaries use the money, you’d be better off creating a trust. With a trust, you can stipulate that your heirs only receive the money when they reach a certain age or obtain a college degree.
An insurance company could deny the claim. For example, a person may have missed payments, leading the insurance company to declare that the policy has lapsed. There may have been fraud on the part of the insured, like hiding their true health condition. There could also be a suicide clause, which prevents a life insurance policy from paying out if the person dies by suicide during the first two years after the claim.
Although lawsuits are relatively rare, there have been circumstances where a dispute turns into a lawsuit, as the Jagger case demonstrates. And in those situations, the lawsuits are typically public record. The Rolling Stones were reportedly disturbed by the fact that private details about their loved ones and their health conditions were made public because of the insurance dispute. The Scott family blamed Jagger - who is worth at least $300 million - for seeking to collect under the policy. The reality is that the decision to collect under the policy wasn’t made by Jagger or his bandmates alone. Other companies were also covered by it, including AEG, one of the world’s largest tour promoters.
Controversy Over the Scott Estate
Meanwhile, Scott’s decision to leave her estate to Jagger rather than to her siblings exposed some family tensions. The will was just three pages and it gave all of her property to Jagger, including any money or things not specifically listed. In most jurisdictions, when someone dies without a will, siblings only inherit if there are no surviving children or a surviving spouse. Since Scott had no children, her will therefore disinherited her siblings. The siblings were reportedly unhappy with Scott’s decision. They considered filing a will challenge on the basis that she may not have been of sound mind when she drafted the will, but after serious consideration, they decided not to sue. It is possible that they entered into a private agreement with Jagger, but whatever happened wasn’t public.
The Scott situation is another reminder of how important it is to have a thorough estate plan that is communicated to your loved ones, even if you are disinheriting them.
