Paul Daugherty of the Cincinnati Enquirer once again allowed me to write his The Morning Line blog. I hope you enjoy it.
China’s Ministry of Culture has vowed to crack down on the presence of strippers at funerals. Apparently, strippers are used to bolster attendance at the funerals. A well attended funeral is considered a positive sign for the after life of the deceased.
Three quick points:
1. It is rare when “culture” and “strippers” are used in the same sentence.
2. China might now be eclipsing the US culturally in addition to economically.
3. Janice has permission to have strippers at my funeral so come one, come all.
In tilting at windmills news, the House of Representatives voted this week to repeal the estate tax. The bill also provides that estates would continue to avoid payment of capital gains tax on appreciated assets even in the absence of the estate tax.
Several quick points:
1. With President Obama annually proposing an increase in the estate tax rate from 40% to 45% and taxing capital gains on appreciated assets, while also lowering the threshold at which taxes become due to $3.5 million from $5.43 million, this bill has no chance of passing during the next two years.
2. Last year, only 5,000 estates paid federal estate taxes, a rate of 2 out of 1,000. I suspect that many of the beneficiaries of an estate tax repeal would be the same Wall Street weenies, most of whom vote Democrat, who already benefit from favorable taxation of their compensation due to calling it carried interest rather than earned income.
3. With this Quixotic bill passed, the House Republicans can now devote their energy to passing a 60th bill to defund or repeal Obamacare.
Robert Durst is the NY real estate heir who was recently arrested in New Orleans for the 2000 murder of his friend, Susan Berman, who was found dead with a single gun shot wound to her head. She had supposedly been contacted by police about the 1982 disappearance of Durst’s first wife shortly before her death. Durst has been married to Deborah Lee Charatan, an ambitious NY real estate broker, since 8 days before the murder of Berman, although they had dated for 12 years prior. Durst was bought out of his family’s trust for $65 million in 2006 and is now reportedly worth $100 million. In the finale of HBO’s series, “Jinxed”, Durst is recorded as saying he killed them all (i.e wife, friend, and neighbor). Haratan is reportedly living with one of Durst’s lawyers even though she is still married to Durst.
Several quick points:
1. As a general rule, spouses are not required to testify against each other in a trial so a marriage to Charatan would protect Durst from any testimony by her about his past and where the bodies are buried, so to speak.
2. If Durst dies in prison, Charatan will likely inherit a large portion of his estate. It is difficult to entirely disinherit a spouse – in Ohio a spouse is entitled to half the probate estate if there are no children, even if the will provides otherwise.
3. It is high stakes gambling to be involved with someone suspected of killing a spouse and girlfriend, and who was acquitted of killing and dismembering a neighbor while living as a mute woman, although a payoff of $50 million at his death might make it worthwhile. Emphasis on might.
4. Living with one of the attorneys of someone who killed and dismembered a neighbor is not advisable due to the possibility of raising his ire and meeting the same fate as his wife, friend, and neighbor. Living 1,000 miles away would be the smart play.
Just returned from Beaver Creek/Vail. New post to follow soon.
(Wish that were me – it is Jack)
Max Maisel, the college age son of Sports Illustrated writer Ivan Maisel, disappeared last month in Rochester and is presumed to have committed suicide by drowning. The family held a memorial service for him last Friday. His father posted his touching eulogy on Twitter today.
Among the humorous anecdotes and moments of parental pain, as the parent of a college freshman, this is the most frightening: “No parent knows how a child lives at college. Clearly, the disaster we have on our hands is an indication of that. We didn’t recognize the downward spiral Max was in, and that is the burden that psychologists tell us we can’t carry. As much as we tried, as great a job as our friends and family tell us we did, it wasn’t enough.”
Give your children an extra hug tonight. I will.
Former University of North Carolina basketball players received $200 checks this week from the trust of their coach, Dean Smith, who died last month. The legendary coach instructed his trustee to distribute that sum to each of the players who lettered for him. The letter accompanying the checks asked the players to enjoy a dinner out on Coach Smith.
No points today – I simply wanted to recognize a final classy gesture by a classy man.
As news breaks that Bobbi Kristina Brown will be moved to a long term care facility, one wonders what will become of her estate. Or at least those of us in the estate planning field wonder. Her mother, Whitney Houston, left her reportedly $20 million estate in trust for Bobbi Kristina per the terms of her 1993 will. Bobbi Kristina should have received 10% of that on her 21st birthday last year under the terms of the trust. Bobbi Kristina’s assets will go to her closest living relatives i.e. her father, Bobby Brown. The remaining 90% of the trust will be distributed per the terms of Whitney’s will which means to her mother and her two brothers. Bobby Brown was also listed as a trust beneficiary, as was her father who died in 2003, but is precluded from inheriting from Whitney due to their 2007 divorce.
1. Whitney should have updated her will multiple times – as her daughter aged, after the death of her father in 2003, and after her divorce in 2007.
2. Distributing trust assets to a child at the age of 21 is a bad idea. I never draft a trust that permits a distribution prior to age 25. I also have a clause prohibiting distributions to beneficiaries suffering from drug use, alcohol abuse, or a gambling problem.
3. Recreational drug use is expensive. In an age where Lou Reed’s estate was valued at $20 million primarily based on one song (“Walk on the Wild Side”), a $20 million estate seems small for an artist of Whitney’s stature recording in an era of larger royalties and multi-platinum CDs, with a film career to boot. Not that Lou Reed did not do drugs.
A couple prepared wills leaving all of their assets to each other. The husband’s father was the beneficiary if they both died. The couple subsequently divorced. The woman allegedly prepared a new will, which she gave to her neighbor, leaving her estate to her brothers. That will has not been found. After the woman died, her ex-husband produced the will from their marriage. Although the divorce precluded the ex-husband him from inheriting from her, his father was still considered a valid beneficiary. Courts have ruled that the will from her marriage controls and that the former father-in-law will receive her estate. The New York Court of Appeals will hear her family’s appeal.
1. Most states have laws treating a divorced spouse as a pre-deceased beneficiary of a will, trust, insurance, and retirement plan. Those laws do not affect the contingent beneficiaries.
2. Divorced individuals should immediately update their wills and beneficiary designations as soon as possible during the divorce process. This is more imperative for those without children.
3. My policy is to retain my clients’ original documents, send them copies, and urge them to notify their designated executor of the location of the copies (which have my name on them).
4. In desperate times, leaving a copy of the will in the refrigerator is always preferable to giving the original will to a neighbor even if it ends up smelling like rotten vegetables, spoiled mayo, or Green Goddess salad dressing.
Photo by Mark Brewer