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Father’s Day, Fashion, and Football

On Father’s Day, let’s briefly recap the will of fashion designer, Oscar De La Renta, who died last Fall.  It was recently reported that he snubbed his adopted son, Moises, in his will because he was upset that his then 20 year old son had tried to compete with him in the fashion design business by producing five or six pieces under his own name 10 years ago.  De La Renta left $18 million of real estate to his second wife of 25 years, then put the rest in trust for her, her children, and his son.  That amount likely was $5.34 million.

Several points:

1.  Funds left to his wife will not be subject to estate taxation until her death while leaving anything in excess of $5.34 million in trust or to his son will be taxed at a rate of 40%.

2.  Context is everything.   I doubt De La Renta was so insecure as to have been threatened or annoyed by his son’s attempt to follow him into the business.  Reporting that the son was disinherited for that reason makes for a nice narrative, albeit false.

3.  After 25 years of marriage, it is not unusual to leave a significant portion of an estate to a spouse, even if there are children from a prior marriage.  Leaving a football team worth $1 billion to a third wife of 10 years is questionable, though, Tom Benson.

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Fixed Fees Are Preferable

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Cheat His Mom Then Cheat His Son

Anthony Marshall was the son of socialite Brooke Astor.  He was convicted of elder abuse of his mother and served two months in jail for stealing $14 million from her.  In his will, which was recently admitted to probate court, he left all of his assets to his second wife and her children.  He specifically excluded his son, Philip Marshall, who was the individual who notified authorities of his father’s treatment of Ms. Astor.  The younger Marshall will not contest his father’s will.

Three quick points:

1.  The will would be difficult to challenge unless the younger Marshall could prove that his father lacked mental capacity to execute the will.

2.  The purposeful omission of the younger Marshall for ratting out his father is evidence that the father was mentally competent.

3.  If a man steals from his mom, it is not beneath him to vengefully disinherit his son.

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Dead Actors Society

The children and widow of Robin Williams are continuing to fight over his estate.  His widow is seeking items left in the house even though Mr. Williams’ will left his jewelry, clothing, memorabilia, and awards to his children.  The list of 300 disputed items reportedly includes underwear, slipper, and t shirts.  More importantly, the widow will receive in trust an undetermined amount of money to care for the house he left her.  Of course, the parties cannot agree on this amount.

Several points:

1.  Williams and his attorney should have determined a specific amount for the upkeep of the house and erred on the high side.  Vagueness in a will/trust only leads to disputes.

2.  Fighting over underwear etc. proves that some people want to fight simply because the probate process is their last chance to fight with their siblings or step-parent.

3.  Even though the parties both claim the underwear, rumor has it that they left the Patch Adams memorabilia at the curb for the garbageman.

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The Thrill Is Gone Part II

Since BB King died two weeks ago, some of his family members have accused his manager of poisoning him and have also threatened to challenge his will.  King allegedly left his 13 children $5,000 each and left $3,000 to his grandchildren.  He left the balance of his estate in trust for the education of future descendants.

Several points:

1.  When children make ludicrous accusations against a long time friend and confidante, it is easy to see why Mr. King would want to leave them a nominal amount from his estate.

2.  To ward off a will contest, Mr. King could have left them a larger sum i.e. $50K and tied the acceptance of it to not contesting the will.  If someone contested the will, she would not receive her inheritance.

3.  With their educations funded by Mr. King, perhaps his future descendants will realize that 89 year old diabetics in hospice care die naturally and not from poisoning.

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Memorial Day 2015

Taking a break from people fighting over estates, let us remember those who fought for us and our country.  I read the following for the first time this weekend and found it to be poignant about the sacrifices of our military men and women.

“It is, in a way, an odd thing to honor those who died in defense of our country, in defense of us, in wars far away. The imagination plays a trick. We see these soldiers in our mind as old and wise. We see them as something like the Founding Fathers, grave and gray haired. But most of them were boys when they died, and they gave up two lives — the one they were living and the one they would have lived. When they died, they gave up their chance to be husbands and fathers and grandfathers. They gave up their chance to be revered old men. They gave up everything for our country, for us. And all we can do is remember.”

President Reagan, 1985

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Big Tips and Big Bequests

Late NYC art dealer, Robert Ellsworth, was in the news recently because he left $50,000 in his will to two waitresses at his favorite restaurant. He also left $10 million, a house in Connecticut,  and $5,000/month to his boyfriend of 50 years who was 17 when he moved in with Ellsworth  The boyfriend is challenging the will because of bequests made in trust to various charities, including Harvard, which would result in the estate planning attorney earning fees for serving as trustee of the trusts.  The boyfriend alleges that Ellsworth was suffering from dementia when he revised his will to include the charities.

Several points:

1.  Presumably a prior will made by Ellsworth was more favorable to the boyfriend because it would be reinstated if the most recent will is declared invalid.

2.  $10 million and $5K/month seems generous, but is barely 5% of Ellsworth’s $200 million estate.

3.  Regarding the attorney serving as trustee of the charitable trusts, I generally decline to serve as executor or trustee for my clients because of perceived conflicts of interest.

4.  If Cher could live with Sonny when she was 16, I guess it was then socially acceptable for the 17 year old boyfriend to move in with the then 37 year old Ellsworth.  Now, Ellsworth would be arrested for being involved with a minor, unless he was Doug Hutchison and she was Courtney Stodden.

5.  With its $32 billion endowment, can we all agree that Harvard does not need a nickel more and should use its endowment to lower its tuition?

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Bury and Not Shred?

A NH woman was sentenced to up to 3 years in jail for digging up the body of her father last year.  He died in 2004.  The woman was miffed that she had been omitted from her father’s will and was convinced her that her family had buried her father’s real will with his body.  She did not find a will but reportedly found a bottle of vodka and a pack of cigarettes in his coffin.

Several points:

1.  I offer to retain the original wills and trusts for my clients.  I never suspected that preventing grave robbing is a good reason for doing so.

2. The deceased was survived by his wife.  It would have been unlikely for a daughter to inherit anything upon his death while her mother survived.

3.  The father would have had good reason to disinherit a daughter who was obsessed with exhuming his body for 10 years while claiming she was doing it for him.

4.  For some reason, the woman never thought that a shredder would be a more effective way for a family to dispose of an unwanted will.

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The Morning Line Again

Paul Daugherty of the Cincinnati Enquirer once again allowed me to write his The Morning Line blog.  I hope you enjoy it.  

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And This Is a Bad Idea?

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.

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Will the Senate be Sancho Panza?

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.

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Jinxed? No, Just Smart.

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.

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Back From Spring Break

Just returned from Beaver Creek/Vail.  New post to follow soon.

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(Wish that were me – it is Jack)

 

May Your Children Always Be Safe

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.

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It’s Always About the Team

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.

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She Didn’t Know

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.

Several points:

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.

 

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Know Thy Neighbor (Before Giving Her Your Will)

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.

Several points:

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.

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Photo by Mark Brewer

No Longer “Blurred Lines”

Following up on a previous post, earlier today a California jury awarded the estate of Marvin Gaye over $7 million in damages to be paid by Robin Thicke and Pharrell Williams for their infringement of Gaye’s song “Got To Give It Up”  in their “Blurred Lines” hit.  Their song has made $17 million,of which $5.5 million was paid to Thicke and $5 million was paid to Williams.

Two quick points:

1.  I still believe that it was silly of Thicke and Williams to initiate this lawsuit to prove their ownership of the song.  It is usually best to let sleeping dogs lie.

2.  I doubt that Williams will be “Happy” with this verdict.

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Never Tell the Kids They Are Being Left Out of the Will

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Happy Birthday, Jack

Happy 15th birthday to my son, Jack.

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All Posts By Jay Brinker

I am an attorney located in Cincinnati, Ohio who practices in the areas of estate planning, probate, asset protection, and small business advice. I make a difficult and bewildering process as simple as possible. Most importantly, I provide "more for less" for my clients.