A Milwaukee attorney and another law firm represented the family of a couple innocently killed in a horrific DUI accident. After reaching a settlement with one insurance company for $250,000, the attorney committed suicide. The executor of his estate found the $250,000 check payable to the attorney and the other firm and sent it to other firm for safekeeping. The other firm cashed the check but then refused to give the deceased attorney’s share of the attorney fees to his estate alleging he breached the fee sharing agreement by committing suicide.
1. Checks payable to someone who subsequently dies are part of the probate estate.
2. I am not sure how the law firm was able to cash a check payable to two parties.
3. The legal fee in this matter was clearly earned when the settlement was received so the law firm’s theory for non-payment has no grounds.
4. With business partners like the law firm, I can see why the attorney thought the world was bleak.
No celebrity wills and probate today, instead a bit of love for Cincinnati. National Geographic Traveler noticed all of the energy and happenings in town from 21 C Hotel to OTR and from Rhinegeist Brewery to the American Sign Museum. A former NYC resident now living in town said, “Cincinnati has gone from musty to must see.” So true. Walk taller and with your chest out, Cincinnati.
The will of Philip Seymour Hoffman was admitted to probate this week. Despite sloppy media reporting about a trust for his son (I am looking at you Reuters and New York Daily News), the will left all of his $35 million estimated estate to his girlfriend, and mother of his 3 children, Mimi O’Donnell. The will also had an unusual request that his son be raised in NYC, San Francisco, or Chicago. The will was signed before the birth of his 2 daughters.
1. Wills should be reviewed after the birth of a child to ensure that the new baby is included and to ensure that the proposed guardian can adequately care for the additional child.
2. Hoffman’s estate will owe approximately $12 million in federal estate taxes on the 9 month anniversary of his death. The tax could have been delayed until the death of Mimi O’Donnell due to the use of the marital deduction if they had been married.
3. If the mainstream media will not employ fact checkers, I am available for $300 per hour to review and advise them on wills of famous people.
4. The 55 unused bags of heroin in his apartment were not addressed by the will.
5. NYC, Chicago, and San Francisco? Apparently diversity is good, but does not include being exposed to Republicans.
As noted earlier, when Paul Walker’s executor filed his will with the probate court, he estimated his future income at $8 million and this total estate at $25 million. Also, as noted last Fall, the Executors of Michael Jackson’s estate are battling the IRS over the value of his estate, which they declared to be only $7 million but the IRS contends is worth more than $1 billion. The discrepancy stems largely over the value of MJ’s likeness for commercial purposes (t shirts, merchandise) and the value of his musical catalog which also includes Beatles songs. His estate valued them at $2,100 and $0 respectively. The IRS valued them at a combined $900 million.
1. If Paul Walker will earn $8 million post-mortem, a $7 million valuation for Jackson’s estate is ludicrous.
2. The King of Pop grossed $160 million in 2013, more than any other celebrity belying the low valuation of his music if not his likeness.
3. I doubt that the image of a deceased entertainer with MJ’s murky past is worth $450 million, but it is worth more than $2,100.
4. It might seem like the IRS “won’t stop ’til it gets enough” and the issues are “black or white,” but the estate’s stated values are “bad” if not “dangerous” and could make his family “scream” if they do not “beat it.”
The will of “Fast and Furious” star, Paul Walker, was admitted to probate last week. The 2001 document has garnered some media attention because it appoints his father as executor of his $25 million estate which he left to a trust and designates his mother as guardian of his daughter, Meadow Rain, even though her mother survived her. His estate consists of $10 million of investments, a house with $8.5 million equity, and projected $8 million residuals from his movies.
1. In split household situations, the biological parent will almost always be the sole guardian of a minor child even if the will designates someone else.
2. In split household situations, I always designate a guardian for the minor children, although I condition it on the other parent being unable to provide a stable home environment.
3. Mr. Walker could have avoided the probate process on his investments by adding a transfer on death (TOD) designation to his trust.
4. Meadow Rain? In the annals of names of celebrity children it is probably better than Apple Martin and Blue Ivy Carter, and definitely better than Peaches Honeyblossom Geldof, Fifi Trixibelle Geldof, Moon Unit Zappa, and Diva Muffin Zappa but falls short of Tallulah Willis and Scout Willis.
Bill Graham was a famous concert promoter who died in a helicopter crash in 1991. His estate sold his company, Bill Graham Enterprises, in 1997. Prior to selling the company, the estate transferred his copyrights and trademarks, including the rights to famous concert posters, to the company. His sons, who each inherited $10 million, sued the executor in Federal Court in 2010 for not disclosing the sale to them. The sons allegedly discovered the sale while rummaging through their father’s business records in ’09. The suit was initially dismissed because the 4 year statute of limitations had long expired, but the 9th Circuit said that the case may proceed to trial.
1. Probate is a state court matter. I do not know why this is in federal court unless the attorneys were counting on the 9th Circuit to make an out of left field ruling in their favor.
2. Of course a business transaction that looks good in 1997 might be viewed as less savvy in 2010.
3. I suspect that the sons had depleted most of their inheritance and were actually rummaging for dollars when they “discovered” the sale of the property.
I have previously blogged about the estate of Huguette Clark and the resulting litigation. Her heirs, will beneficiaries, day nurse, attorney, and accountant reached a settlement last September in which the nurse forsook a $30 million bequest and agreed to return $6.7 million of the $31 million she had previously received, the accountant and attorney agreed to waive their rights to the $1 million they were to receive, and the heirs agreed to share $38 million after being left out of the will. Now, the night nurse, who made $131K annually and received gifts of $1 million and was not a party to the settlement is suing the estate for being left out of the will after she was allegedly promised money by Ms. Clark. The estate is suing her to return some of the gifts.
1. On its face, it does seem unfair that the day nurse received gifts of $30 million while the night nurse received $1 million while both worked 12 hour days, but then the night nurse only had limited hours to discuss gifts with Ms. Clark due to Ms. Clark’s sleep needs.
2. Ms. Clark had no obligation to leave her nurse anything in her will. Cases trying to enforce promises to leave a bequest are extremely difficult to win.
3. Even without receiving anything in the will, the nurse made out fine with her six figure salary and seven figure gift for sitting next to a sleeping woman for 20 years.
4. In what looks like the 1% exploiting the 99%, the nurses either received nothing under the will and had to return prior gifts while the attorneys shared fees of $24 million. In actuality, it was the rich exploiting the less rich because her night nurse’s income and assets placed her in the top 4% in the U.S. Sympathies are hard to place in this story.
Time away from the office is chewing up blogging time. My son and I were skiing together last weekend in Colorado. Picture below. New post to follow.
I am sure you have seen this, but it is still worth commenting on. A 13 year old California girl suffered tragic complications after undergoing sleep apnea surgery and was declared brain dead by the physicians at the hospital where the surgery was performed. Her family has contested the “brain death” declaration and has had her transferred to an disclosed facility with beliefs similar to theirs.
Two major points (no snark with these horrible circumstances):
1. Adults can avoid the ramifications of a similar situation by executing a living will about their intentions if declared brain dead and by designating a health care surrogate to act in their stead via a health care power of attorney.
2. The declaration of intent and designation of a surrogate are only as good as the person tasked with carrying out one’s wishes. Be sure that the surrogate shares one’s intellect and values, and respects one’s wishes.
An NYC heiress has accused her estranged husband of duping her into giving him $750K of her trust funds which he allegedly spent on his mistress. The 39 year old woman met her 30 year old husband at a tanning salon in 2010, married him in 2011, and soon ended up withdrawing funds to pay his alleged “gambling debts.” At one time she withdrew $150K cash from a bank and placed it in a duffel bag. She alleges that her husband used the funds to take his mistress to Vegas and the Dominican Republic and to purchase gifts from Bloomingdales, Louis Vuitton, and Cartier.
Three quick points:
1. A trust fund that allows a beneficiary to withdraw $150K and place it in a duffel bag is not very effective.
2. A trust beneficiary capable of being duped to the tune of $750K in 2 years needs more restrictive trust terms.
3. In ranking questionable locales for meeting prospective spouses, a tanning salon ranks below AA but only slightly above a rehab facility.