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Ex-Spouses Are Dead

A Naples, FL police officer shot his girlfriend before killing himself.  His ex-wife, whom he divorced in 2013, was the designated beneficiary of his police pension.  He had made the designation in 2004 during happier times.  Florida passed a law in 2012 which provides that if a divorced person fails to change the beneficiary of an asset post-divorce, the ex-spouse will be treated as deceased and not entitled to the asset.  Of course,  the ex-wife is contesting the applicability of the statute and claiming the pension benefits.

Several points:

1.  Ohio passed a similar statute in 1990.

2.  Ohio’s Supreme Court later ruled that the statute was only applicable to beneficiary designations made after 1990. To hold otherwise, would have retroactively modified a contract.

3.   If spouses dislike each other enough to divorce, they should follow through to change their wills and beneficiary designations after the divorce is final to avoid leaving them assets at death.

4.  Even without the pension, the ex-wife is better off than the girlfriend who was critically injured when she was shot in the face.

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Please, Please, Please (Settle This Estate)

James Brown died in 2006 and left most of his estate to charity.  A woman claiming to be his wife is contesting the will.  Tomirae Hynie and the Godfather of Soul married in 2001 but she was married to another man at the time.  She eventually had that marriage annulled in 2004, but Brown then refused to marry her because he was embarrassed about the prior marriage.   Hynie has stated that her prior marriage to her Pakistani husband was simply an immigration scam.  Brown named 6 children in his will and left out 5 others.  To benefit from his estate, the children have been ordered to submit to DNA testing to prove their parentage.  Those that pass are called DNA Proven children.

Several points:

1.  By law, spouses are entitled to a portion of a deceased spouse’s estate even if not provided for in the will.  In Ohio, spouse’s with more than one child will receive one-third of the estate.

2.  I have never heard the term “DNA Proven children” before.  I think it ranks with “thunder snow” as a great modern phrase.

3.  Hynie is very determined to inherit when she admits under oath to committing immigration fraud.  Although given recent events, that might not be the serious matter one would initially believe.

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World’s Greatest Dad?

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.

Several points:

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.”

 

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This Never Works, So Why Try?

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.

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Public Radio

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.

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News You Can Use – Estate Tax Exemption for 2015

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.

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A Touch of Tears (and Cincinnati Pride)

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.

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Blood Money

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.

 

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The Curious Case of Brangelina

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.

Several points:

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.

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Let’s Get It On

In a slow news period while waiting for info on Joan Rivers’ will, let’s keep it in the estate arena but mix it with pop music. The estate of Marvin Gaye is battling Robin Thicke and Pharrell Williams over whether “Blurred Lines” plagiarized Gaye’s song “Got To Give It Up.”  The case is premised on comments Thicke made that “Got To Give It Up” was one of his all time favorite songs and that he wanted to make a song like it.   After taking credit for “Blurred Lines” in interviews, in his deposition under oath Thicke later pleaded drug and alcohol abuse during the creation of “Blurred Lines” and deferred credit to Pharrell Williams as the primary songwriter.  He and Williams later sued Gaye’s estate in a declaratory judgment action that they did not plagiarize the Gaye song.

Several points:

1.   Thicke and Williams should not have sued Gaye’s estate.  They precipitated an unnecessary battle – if the estate thought the songs were identical, it could have sued them.

2.  I doubt Williams is feeling “Happy” after Thicke threw him under the bus after Williams gave Thicke the only reason people know him besides being the son of Alan Thicke.

3.  “Got To Give It Up” does not rank in my top 20 Gaye songs.  Thicke must have been drugged and drunk to say it is one of his all time favorites.

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Blissful Ignorance?

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.

Many points:

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.

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Crazy is as Crazy Does

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.

Several points:

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.

 

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It’s Too Late

Do not wait too long to revise your will.

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To Have and Have Not (a Trust)

The executors of Lauren Bacall’s estate filed her will in probate court on Friday.  Her will, which she executed last fall, left her $27 million estate in equal shares to her 3 children save for a few small five figure bequests to household staff and to her son to care for her dog.    She also left $250K to each of her grandsons to be used for college with them receiving the remainder at the age of 30.

Several points:

1.  A funded trust would have provided her privacy so the public would not know about her intentions.

2.  A trust would also be a more efficient means of managing the funds for her grandsons.

3.  With college tuition increases not grounded in economic reality, I hope the $250K is enough to fully cover college expenses for her grandsons.     lauren Bacall-Lauren_15

The Morning Line (Again)

Paul Daugherty of the Cincinnati Enquirer has once again graciously allowed me to guest write his The Morning Line blog.

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Free Nelson Mandela’s Estate

Winnie Mandela, the ex-wife of Nelson Mandela, filed a claim against his estate seeking control of his ancestral home for her daughters.  Mandela divorced Winnie in 1996 after he charged that she had been unfaithful to him during his 27 year imprisonment.  Mandela’s  will left the ancestral home to his 3rd wife who later waived her right to half of his estate in exchange for  properties in her native Mozambique. Mandela’s grandson later ordered the exhumation of the bodies of 3 of Mandela’s children from the ancestral home, but Mandela’s daughter had the bodies re-interred at the disputed home.

Several points, if I must:

1.  It is odd that an elderly mother would be the one to file a claim on behalf of her middle aged daughters.  Adolescence is seemingly prolonged every year.

2.  If the South African court system moves at the same pace as it did for the Oscar Pistorius trial, Winnie and the third wife will die before there is a resolution.

3.  Whoever can convince the various members and factions of the Mandela family to have a group hug deserves a Nobel Peace Prize.

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R.I.P. Robin Williams

My favorite piece was his take on golf.  He will be missed.

 

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His Feet Should Be in the Ground

Casey Kasem died a month ago but his body remains unburied.  Reportedly, just prior to his daughter obtaining a court order to keep his body in the U.S., his wife had his body shipped to Montreal, the home of her alleged boyfriend.   Additionally, Jean Kasem’s law firm is seeking to resign as her attorneys after she has allegedly incurred unpaid legal bills of $500,000 during her dispute with his children. The law firm has threatened to file a claim a claim against his estate for payment of its services.

Two points, if I must:

1.  Creditors of a decedent can file a claim against the estate for unpaid debts.  Services rendered on behalf of one party in a deathbed dispute are not necessarily the responsibility of the estate especially if the party loses.

2.  I would would not think too long about continuing a romantic relationship with a meat throwing and scripture quoting partner who has her deceased husband’s remains shipped to my hometown.  To paraphrase Kramer on Seinfeld, “Two words, Jerry.  Break up.”

 

Jean Kasem, widow of Casey Kasem

Jean Kasem, widow of Casey Kasem

Back in Town

Just returned from 2 weeks in Spain and Morocco.   Blog post to follow.  In the meantime, here are some vacation pics of my children.

Blair and Jack at Majorelle Gardens in Marrakech.  Gardens were created by Yves St. Laurent.

Blair and Jack at Majorelle Gardens in Marrakech. Gardens were created by Yves St. Laurent.

Blair and Jack at Medersa Ben Youssef in Marrakech.

Blair and Jack at Medersa Ben Youssef in Marrakech.

Blair and Jack in Grenada with view of Alhambra.

Blair and Jack in Grenada with view of Alhambra.

Blair and Jack at Alcazar, Seville, Spain.

Blair and Jack at Alcazar, Seville, Spain.

Jack in Marrakech

Jack in Marrakech

Blair wit snake charmer in Jemaa el-Fnaa Square in Marrakech.  Note cobra in the right hand  corner.

Blair wit snake charmer in Jemaa el-Fnaa Square in Marrakech. Note cobra in the right hand corner.

Jack with "ape" of Gibraltar.

Jack with “ape” of Gibraltar.

Blair and Jack in Barcelona.

Blair and Jack in Barcelona.

Blair and Jack at Gibraltar with Africa in background.

Blair and Jack at Gibraltar with Africa in background.

Blair at Medersa Ben Youssef in Marrakech.

Blair at Medersa Ben Youssef in Marrakech.

Up In Smoke

When jet setting heiress, Doris Duke, died in 1993 she left a small trust for her last living relative, Walker Inman, Jr.  Inman lived with her after being orphaned at the age of 13.  He had previously inherited an inflation adjusted equivalent of $350 million from other relatives when he turned 21.

Inman died of a methadone overdose in 2010.  He left his remaining fortune in trust for his now 16 year old twins.  The twins and their mother are suing the trustees of the trusts trying to determine how much money is left while complaining that the trustees they were too generous in giving money to Inman who spent $90K per month.  Meanwhile the mother is asking the trustees to buy a $29 million ranch and a $4.2 house, and reimburse her $17K for 4 days in Vegas. His fifth wife, and proverbial former topless dancer, has asked for $1.9 million.  The trustee has vetoed those requests.   The twins will receive their inheritance at 21.

Several points:

1.  21 is way too young to receive a principal distribution of any significance.  I stagger distributions in my trusts with increasing amounts over time with the first distribution at 25 and the final distribution at the age of 40.

2.  An anti-alcoholism, drugs, and gambling clause is also recommended to prevent heirs from harming themselves with their inheritance.

3.  Supposedly nothing is sadder than the tears of a clown, but I think a middle aged man dying of a drug overdose is close.   Sad meaning pitiful.

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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.