Robin Williams’ will was admitted to probate court last week. It provides that his entire $50 million estate will be left to a trust for the benefit of his 3 children. The trust provides that his children will receive their inheritance in stages at the ages of 21, 25, and 30.
1. Net of estate taxes, each child will $10 million in installments of $3.33 million.
2. I would never advise a client to leave such a large sum to a 21 or 25 year old – the child’s initiative to become a successful, independent, adult can be stifled.
3. I recommend more installments with increasing percentages of funds as the child ages.
4. Williams’ children will likely view their dad as the “World’s Greatest Dad” but I think this trust is a “Flubber.”
Alan Hruby is the 19 year old, college freshman accused of killing his parents and 17 year old sister so he could inherit his parent’s estates after they stopped supporting him financially. The self described shopaholic who got a thrill from using credit cards was in debt to a loan shark for $3,000. He allegedly confessed to killing his sister so he would be the sole heir.
Several quick points.
1. A slayer statute (murderers cannot benefit from their crimes) will prevent him from inheriting any funds from his parents.
2. The poor sister was killed because he wanted all of the estate when half was more than enough to cover the $3,000. How tragic.
3. If one needs further proof that the adolescent brain does not fully develop until 25, just look at the 19 year upper class kid facing life in prison, or death, without a family because of a $3,000 debt.
Thank you to Chris DeSimio for inviting me to discuss various estate planning and inheritance issues with him on WVXU’s Cincinnati Edition hosted by Mark Heyne yesterday.
The IRS announced that the estate tax exemption for 2015 will increase from $5.34 million to $5.43 million. This is the amount that can be left estate tax free to heirs. Those taxpayers suffering from dyslexia will see little difference.
Check out the article in Cincinnati Magazine about how various people assisted the family of the slain owner of Cosmic Pizza after his murder during a robbery last year. The willingness of strangers and acquaintances to step up and help will moisten your eyes. Cincinnati residents always look out for their own. Props to everyone who assisted the Evans family.
Josh Powell is the Utah man who presumably killed his wife in 2009 and concocted an improbable story to explain her disappearance (he took his young sons on an impromptu camping trip at midnight on a snowy, December night). During a custody dispute with his wife’s parents, he locked himself in a cabin, hatcheted his sons to death, and blew up the cabin immolating himself in 2012. His brother, who was suspected of helping him dispose of his wife’s body, committed suicide a year later. His father, who exhibited odd behavior after the wife’s disappearance, served two years for voyeurism after authorities found pictures of neighborhood girls and women on his computer.
This case is back in the news because the Powell family and the Cox family are squabbling over the sizable life insurance proceeds on the lives of Powell and his wife. A trust created by Susan Powell is the beneficiary of the policy on her life. The trust presumably provided that if her husband and son were not living that the proceeds were to be divided between the Powell family and the Cox family. Her father as conservator of her estate changed the trust in 2013 to provide that only the Cox family would benefit from the trust. Josh Powell designated his now deceased brother as the beneficiary of his policy after his wife’s disappearance. His brother and sister are fighting the Cox family for those benefits.
Whew. Several points:
1. Bad facts make bad law. On the face it seems that no one in the Powell family should benefit from the misdeeds of their family member but the law correctly applied provides otherwise and the families should divide the insurance proceeds, or at least keep the proceeds from the policy on their respective family member and have the trust proceeds evenly divided per the trust terms.
2. It is crazy to think that someone acting on behalf of another person who the law presumes is alive but everyone else know is dead can change the trust created by that person three years after the date she died.
3. The honorable action for the Powell family members would be to walk away from this. However, when one brother is a murderer, the other is a conspirator, and the father is a convicted voyeur, all shame is already in the public sphere so they might as well see if they can grab some money, consequences and public opinion be damned.
Not being a reader of People magazine, I missed the news of the Brad Pitt- Angelina Jolie August wedding. I had assumed they were married years ago. Apparently they executed a fairly public pre-nuptial agreement prior to their wedding. The agreement provides that in the event they divorce they will each keep their respective assets but any marital assets will mostly benefit their children and various global orphanages. The odd provision is that in the event Mr. Pitt is unfaithful due to Ms. Jolie’s children penchant for adopting children as if they were Tamagotchi, she will receive most of the custody rights for the children.
1. Pre-nuptial agreements are advisable in the event of second marriages or where there is disparate wealth between the parties. When both parties are Hollywood A Listers with similar net worths, they are more for show than practical effect.
2. The behavior clause about infidelity of Mr. Pitt is unlikely to be enforced by a court.
3. Am I the only one who appreciates the coincidence that Mr. Pitt finally tied the knot with Ms. Jolie only a month before his bromance buddy, George Clooney, married?
4. Presumably Angelina will keep the vial of Billy Bob Thornton’s blood in the event of a divorce.
The will of Andrew Madoff, son of Ponzi schemer Bernie, was admitted to probate court last week. The will reportedly left his personal property valued at $11.5 million to his 2 daughters. He left one third of his $4.5 million of real estate to his estranged wife, and the remaining 2/3 of it to a trust for his long time girlfriend. His girlfriend is to receive $50,000 per month for the rest of her life. Notably, his wife withdrew her 5+ year old divorce filing 6 months ago. Andrew long maintained he was unaware of his father’s activities even though he worked for his father’s firm.
1. It was smart, if not cynical and financially calculating, of his wife to withdraw her divorce complaint prior to his death because assets pass to a spouse free of federal estate taxes.
2. I suspect that he also has a funded trust because there is no way to pay his girlfriend $50K monthly for the rest of her life based on a trust with $3 million principal ($2 million after estate taxes).
3. If there is a funded trust, it behooves the question why these $16 million of assets were not transferred to the trust prior to his death and why the will did not simply pour all assets into the trust and keep these provisions from the public eye.
4. The karma at work in Bernie Madoff;s life is almost commensurate with the amount of money he stole – reported to the feds by the sons he protected from his scheme, estranged from them afterwards, and now both of them dead before the age of 50 while he is alive in prison at 76. Almost commensurate.
A Scottish nurse falsely accused her grandfather of sexually abusing her when she was younger in an attempt to accelerate her inheritance. After the charges were found to be bogus, she was sentenced to 22 months in jail for fabricating the claims which forced her grandfather to spend some time in jail after they were made.
1. Her plot was as poorly conceived as the USC football player’s story about jumping off a balcony to rescue a drowning nephew. There is no law that treats criminals as deceased and then accelerates an inheritance.
2. While she is in jail she might wish to study a table of consanguinity and learn that even if her grandfather were dead, her grandmother would inherit his estate. Her own parent would inherit if her grandmother were deceased.
3. Consider it a hunch, but I suspect she will now never inherit a dime (or should I say shilling) from her grandfather.