Insurers and individuals who suffered losses in New York Yankees pitcher Cory Lidle’s fatal plane crash in Manhattan in 2006 have agreed to accept $2 million and drop the pursuit of almost $60 million in property and personal injury claims against the estates of Lidle and his flight instructor, a mediator in the case said Tuesday.

The claimants accepted the $2 million because Lidle, 34, and the instructor who died with him, Tyler Stanger, 26, had $1 million liability policies each, and the estates had no other assets worth pursuing, says Michael Cohan, who assisted the mediator in the case, retired New Jersey Superior Court Judge Marina Corodemus.

Investigators never determined which man was at the controls when they attempted a turn over the windswept East River on Oct. 11, 2006, in Lidle’s Cirrus SR-20 aircraft and slammed into a high-rise apartment building. Some residents were injured, debris rained down on pedestrians and property damage was in the millions.

Lidle had obtained his pilot’s license earlier in the year and the National Transportation Safety Board ruled that the pilots’ inadequate planning, judgment and airmanship in trying to make a 180-degree turn led to the crash.

Cohan, of counsel to Corodemus & Corodemus in Iselin, N.J., says the $2 million will be split among insurance companies that paid $16.5 million to 11 property owners, six property owners who had further claims and five personal injury plaintiffs.

He says Circuit Judge John Laurent in Polk County, Fla., the probate judge of Lidle’s estate, approved the settlement on Sept. 22, but has not ruled on whether to release Corodemus’s report, which contains a breakdown of the distribution of the $2 million.

“No one wanted to go after the personal assets of the estates,” says Gerald Kirby of Feldman, Rudy, Kirby & Farquharson in Westbury, N.Y., who represented Allstate Insurance Co. and Encompass Insurance Co., which were seeking recovery for property damage claims they paid.

Kirby says his clients paid claims of more than $1 million. Asked how much of that they will receive in the settlement of the subrogation claims, he says, “peanuts.”

Cohan says Corodemus was called in as mediator at the suggestion of the lawyer for the Stanger estate, Eugene Massamillo of Kaplan, Massamillo & Andrews of New York. Cohan says Massamillo, who did not return a call for comment, was familiar with Corodemus’s work as the New Jersey state court judge in charge of mass tort litigation for 10 years before her retirement in 2004.

Cohan says one personal injury claimant, whom he did not identify, did not accept the settlement.

Lidle’s widow and Stanger’s estate have filed a product liability suit in California against the aircraft’s manufacturer, Cirrus Design Corp.

The greatest fallacy most people have about estate planning is the belief that if they die intestate (or without a will) all of their property will go to their spouse.  In fact, it is this belief that keeps many people from creating an estate plan until after one spouse dies.  But this is not necessarily true.  What happens to your estate depends on many factors, including the state in which you live, whether you have children, your marital status and whether you’ve been married before, etc.  There is absolutely no one answer to the question “What happens if I die without a will?” Are you sure you want to take your chances with what might happen?

Another issue that most people just don’t understand is that probate is more often than not a very time consuming and expensive process.  There is a good likelihood that your loved ones will need access to your estate in the months following your death—unfortunately they are not likely to get it!  Probate court calendars, informing creditors, looking for other possible heirs, other family members contesting decisions—all of these and more can keep your estate tied up in probate for months or years, and unavailable to the people who need it most.

And perhaps the least understood drawback to refusing to create an estate plan in a down economy is that the probate courts may force your heirs to sell valuable assets at a time when property values are at their lowest. This alone could result in significant losses to the estate you pass on to your beneficiaries, not to mention probate fees and estate taxes that could have been saved had you planned ahead.

Estate planning may feel like an unnecessary expense, but the more you understand the more you realize just how essential it is.  Creating your estate plan now could be the best investment you make in your family’s future.