- Monday, 17 June 2013 15:14
I previously blogged about rapper Nate Dogg who died in 2011 survived by 6 children of unascertainable ages and different mothers. His estate is back in the news again because the mother of one of his children filed a claim against his estate for unpaid child support from the date of the child’s 2006 birth, plus support since Dogg’s death in 2011. Two other women, one of whom also has a child Dogg fathered in 2006, are arguing in court over the amount of support they are supposed to receive from his estate.
1. In Ohio, claims against an estate must be filed within six months of the date of death. The claim for Dogg’s unpaid back support would be invalid due to untimely filing.
2. In Ohio, child support obligations terminate at death. Adding money for post-death support to an already late claim just makes the claim doubly improper.
3. Dogg’s children are entitled to social security payments until they turn 18.
4. For divorced couples, a life insurance policy is recommended to cover any future child support payments.
5. Dogg could have established a trust to provide for his children upon his death. However, that would have required foresight and planning. For a guy who did not make child support payments nor who wore a condom, such planning would be inconceivable.
- Monday, 10 June 2013 14:41
A SC woman murdered both of her 20 something sons, her ex-husband who lived next door, and her step-mother. She tried to blame the crime on her oldest, murdered son. She was the beneficiary of insurance policies on the victims in the amount of $680K. She had previously killed an alleged intruder and kept 3 guns in the house. She recently plead guilty but mentally ill and was sentenced to life in prison.
What are the estate planning and other issues in this crime?
1. The killer is precluded from inheriting under the state slayer statute which prevents a murderer from benefiting financially from her crime.
2. Without valid wills, the sons’ policies will benefit their grandparents, or aunts and uncles if the grandparents are deceased.
3. If a mother takes out a large life insurance policy on a child, the child should sleep with one eye open.
4. It is never a good idea to live next door to a mentally ill ex-wife, much less one who has already killed a man and who has a life insurance policy on one’s life.
- Wednesday, 05 June 2013 13:51
A Virginia man died of a rare leukemia survived by his 3rd wife. One of his assets was a $125K insurance policy he received while employed by the federal government. The policy listed his second wife as the beneficiary. The surviving spouse contested the former wife’s right to the policy proceeds.
Virginia has a statute which precludes divorced spouses from inheriting from a deceased former spouse. Nonetheless, the US Supreme Court unanimously ruled that the former spouse was entitled to the proceeds because the 1954 federal law establishing the insurance program and providing that beneficiary designations must be followed trumped the Virginia statute which omits former spouses.
1. Ohio has a similar statute to Virginia.
2. After a divorce, individuals MUST revise all of their estate planning documents and update their insurance and retirement plan beneficiary designations.
3. After a leukemia or cancer diagnosis, no matter how positive the treatment options, individuals need to review their estate planning documents and their beneficiary designations.
4. I suspect this was a Pyrrhic victory for the former wife with most of the policy proceeds being consumed by legal fees during the 5 year dispute. But then, most disputes between former spouses are Pyrrhic.
- Thursday, 30 May 2013 12:59
A Pennsylvania attorney and his wife, a successful dentist, perished in a private plane crash in 2007. They had no children so they left their assets to various relatives in their wills. The estates were comprised of a law practice, dental practice, various real estate holdings, and medical businesses in South Carolina and initially estimated to be worth $40 million. After six years and a will contest action, the estate has incurred administrative fees of $3.75 million and has $3 million remaining.
1. With their varied investments, the couple should have used a trust to minimize probate administration expenses.
2. Legal and medical practices are personality dependent and are not worth much without the contribution of the individual who built the practice.
3. $3 million left after an initial $40 million estimate? The 2008 financial crash was brutal on everyone.
4. Private planes are known as doctor and lawyer killers for a reason.
- Friday, 24 May 2013 15:28
The estate of an elderly, childless Fresno woman was officially closed this week when the bulk of her $2.4 million estate was distributed to Fresno State and a smaller percentage including personal items was distributed to the retirement community in which she resided. The estate is newsworthy because she had promised in 2001 to leave her entire estate (then valued at $4 million) to Fresno State in exchange for it naming the education school after her and her late husband. She changed her will multiple times with the final will leaving some assets to her retirement community and naming its foundation as her executor.
1. She would have been well served by a living trust to ensure privacy for this matter.
2. Couples make planned gifts, but after the death of one of them, the survivor is pressured by other charities to leave money to them.
3. Fresno State seems to have conducted itself honorably by not contesting the will and executor appointment and not removing her name from the education school.
4. The retirement home will receive 40 mens’ shirts, 70 ties, and 5 sport coats. Apparently no one cleaned out the husband’s belongings after his 1995 death.
5. The retirement home will also receive 35 turtlenecks and 33 pairs of gloves. I did not think that the weather in Fresno necessitated such a large collection of cold weather gear.
6. I hope no one wants the 60 pairs of undergarments.
7. See point 1.
- Monday, 20 May 2013 13:49
Rapper Heavy D died in late 2011 survived by a now 13 year old daughter, parents, and siblings. His brother, Floyd, recently filed a copy of 1999 will which unsurprisingly left the entire estate to Floyd. The original was allegedly lost years ago.
1. Missing and lost wills are presumed to have been destroyed.
2. Always tell your executor where the original will (and copy) are located. I keep the originals for my clients and provide them copies with instructions to notify their executor of the location of the copy (which is stamped with my name).
3. Without a will, Heavy’s daughter would inherit the entire estate.
4. Birth of children should be the primary reason for executing a will
5. One report said the rapper died before he could revise his will to include his daughter. It stinks when 11 years sneak up on you.
- Wednesday, 15 May 2013 13:57
An animal shelter in Collinsville, Oklahoma which always struggled financially received a $188K check from the estate of an unindentified deceased animal lover. Two weeks later, it received a request from the law firm administering the decedent’s estate to return the check because the bequest was intended for a shelter with the same name in Collinsville, Illinois. The shelter has not yet returned the check, although it has said it will.
1. In making charitable bequests, I always list the address of the charity to prevent this type of confusion.
2. Because of its error, the law firm has stated it will donate $12K to the Oklahoma shelter, which is 6x more than the shelter usually has in the bank.
3. Apparently the Oklahoma shelter spent some of the $188K, perhaps $12K, or else it would have returned the funds last month.
- Saturday, 11 May 2013 14:07
An LA woman might lose the house she shared with her common law husband of 27 years. He allegedly hand wrote a will leaving the house to her. Nonetheless, the Los Angeles County Public Administrator is proceeding with a sale of the house for non-payment of debts and potential buyers traipse through the house while she is present.
1. Even with a handwritten will, the will must be probated. Leaving it in a drawer does not transfer any assets.
2. The common law husband could have added her to the deed as a joint tenant to immediately transfer the house to her upon his death.
3. Some like to decry notions of traditional marriage, but spouses have more rights and protections under law than non-spouses including the right to inherit when there is no will and the right to remain in a house.
4. Even people of modest means and limited assets need estate planning.
5. Newton’s First Law applies to government – a government procedure in motion stays in motion. Someone should pause the bureaucratic machine until the woman’s rights can be ascertained. If banks were behaving this way, there would be an outcry, protests, Congressional hearings, and a class action suit. Because it is a governmental agency, people shrug and figure “that is government.”
- Tuesday, 07 May 2013 14:21
I wish I had the screen rights for this story. A wealthy tech investor was murdered by gang members who were related to the harem of prostitutes who spent considerable time in the house he shared with his ex-wife. In addition to 2 adult children, he had 2 children with a former prostitute who are now seeking support and half of his estate.
1. The claims of the prostitutes’s daughters will depend on how he defined children in his will.
2. Not to be Puritanical, hanging with unsavory characters and living a hedonistic life might be fun, but it rarely ends well.
- Monday, 29 April 2013 18:11
A Holocaust survivor who created a $40 million fortune in real estate died without a will last year. Because a world wide search for relatives has turned up none, New York state will receive his fortune.
1. Escheating to the state is incredibly rare because the laws of intestacy look for any living relative, including cousins and their descendants and any one who falls under the nebulous term “next of kin.”
2. A 97 year old man who is in failing health should not procrastinate in his will preparation.
3. His fellow Holocaust survivor who said “He was a very smart man but he died like an idiot” is accurate.
- Monday, 22 April 2013 13:26
Lois Pope, widow of the founder of the National Enquirer, is seeking a restraining order against her son for allegedly stalking her while demanding money. When the family sold the tabloid in 1988, Mrs. Pope received $200 million and her son received $20 million which she claims he spent by 2008. She gave him another $16 million which he has allegedly spent. In a television interview, he complained that she has spent $40+ million on 2 private jets, $2 million on international vacations, and made large gifts to nieces and nephews.
1. A trust would have helped the son manage and preserve his funds.
2. The trust could have tied distributions to income earned by him which would have forced him to get a job, which apparently he has never held.
3. If the mom gave her son $16 million, she was obligated to file a gift tax return and pay taxes at a 35% – 45% rate.
4. If mom wants to buy planes and use them for flying her dogs around the country, she may do that and the son is powerless to complain.
5. If the son wants more money from his mom, he should refrain from criticizing her on television. The old axiom about not biting the hand that feeds would seem to apply.
- Thursday, 11 April 2013 13:28
No snark, today. Just advice.
Nancy Lanza, mother of the Newtown shooter, left her entire estate to her sons under the terms of a 1994 will which was executed 15 years prior to her divorce. The preliminary filings show an estate with $60K liquid funds and presumably the house she resided in.
1. At some point she and her husband should have revised their estate plan to include a trust for the care of their son (and to minimize estate taxes).
2. Post-divorce, she should have revised her estate plan to remove the ex-husband from her documents and to include a trust for her son.
3. After a divorce from a director/VP at GE Energy Financial Services, and receiving $26K/month alimony, there will be substantially more than $59K in assets. All the more reason to leave the assets in a trust for her son rather than giving it to him directly assuming he would have survived her.
4. All parents with children who are unable to manage finances, whether due to young age or a disability, need to have a trust as part of their estate plan.
5. Anyone who is recently divorced should revise their documents to remove the former spouse and to ensure that the documents reflect their current wishes.
- Wednesday, 10 April 2013 14:27
Ryan O’Neal and the University of Texas are engaged in a lawsuit over a painting of Farrah Fawcett created by Andy Warhol which could be worth $30 million. Farrah’s will left her entire art collection, including another portrait of her by Warhol, to the University of Texas. Mr. O’Neal claims that the painting was given to him by Warhol and that he had taken it to Farrah’s house in 1998 after they broke up because his then girlfriend did not like it in the bedroom.
1. It is generally in poor taste to hang a portrait of an ex in the bedroom while involved with someone else. Kudos to Mr. O’Neal for removing it.
2. When taking a piece of art to an ex, one might want to reclaim it in the 11 intervening years instead of waiting until the ex dies.
3. Apparently the University of Texas is not satisfied with a $7.2 billion endowment and is willing to fight for more.
- Friday, 05 April 2013 13:19
The woman at the center of the U.S.’s most expensive probate battle died this week in Poland. Barbara Piasecka Johnson was a maid who worked for J. Seward Johnson, Jr.’s family, of Johnson and Johnson renown. Within 2 years, then 76 year old Mr. Johnson divorced his second wife and married the then 34 year old servant. When Johnson died 12 years later, he omitted 5 of his 6 children from his will and left nearly all of his of $500 million to his wife. The children contested the will alleging undue influence and settled for $40 million.
1. Mr. Johnson could have provided for both his widow and his children by creating a QTIP trust (a new trust back in 1983) which would have provided assets remaining after his wife’s death would be distributed to his children.
2. Contesting a bequest to a maid on grounds of undue influence is easy. Contesting a bequest to a maid who has been married to the deceased for 12 years on similar grounds is nearly impossible.
3. Marrying someone younger than one’s children is rarely a good idea. It might be better to date her and leave her a condo and a Bentley in a will and preserve family relations.
- Wednesday, 03 April 2013 13:10
Los Angeles Lakers owner, Jerry Buss, died in February at the age of 80. He was known for epitomizing California cool and was often seen with one or more young women on his arm. In his will, he left a Honolulu condo and a 2009 Bentley to his 20-something girlfriend, and the rest of his assets to his trust.
For privacy reasons, he could have transferred the condo and car to his trust, and made the bequest from the trust. This also would have avoided the cost of ancillary probate in Hawaii.
Of course, privacy might have defeated the purpose of letting the world know that at the time of his death he was an 80 year old man with a late 20’s girlfriend. Estate planning always has trade-offs.
- Wednesday, 27 March 2013 12:46
Merton Simpson – a NY artist , pre-eminent collector of African art, and gallery owner – died 2 weeks ago. His body remains unburied at the funeral home due to a family dispute.
Prior to his death, a guardian was appointed to manage Mr. Simpson’s affairs. His estate is valued “in the millions” but the assets are illiquid. The guardian does not have enough funds to pay for a funeral and the executor of the estate has not been appointed yet and will likely also have insufficient liquid funds in the near term.
The primary lesson is that Mr. Simpson should have included a trust in his planning and transferred his assets to it prior to his death. The trustee could have sold art pieces as necessary without outside supervision. Mr. Simpson would have avoided avoided the guardianship, the delay caused by waiting for the court to officially appoint an executor, and the Sherman Hemsley-esque burial fiasco.
Even without estate taxes, trusts are still necessary.
- Saturday, 23 March 2013 18:54
Willa Cather, author of “O Pioneers”, died in 1947. She purportedly destroyed much of her private correspondence and left instructions in her will forbidding the post-mortem publication of any remaining letters. For nearly 70 years, her executors adhered to her wishes. However, with the death of her nephew and second executor in 2011, her wishes are no longer being followed and a book containing 566 of the surviving 3,0000 letters will be published next month. There are various reasons given for her request to not publish the correspondence – a desire for privacy, a late life depression, and a desire to conceal her lesbianism about which scholars have speculated for years.
1. 3000 letters survived? She needed a heavy duty shredder.
2. The best way to ensure post-death privacy is to destroy the letters while alive. After a generation or two, those interested in preserving her wishes will have died and successors will be more motivated by money than her wishes.
3. In an electronic age not prone to letter writing, most people will not be confronted with this issue in the future. No one will want to read a series of texts.
4. Who needs to speculate about the sexual orientation of a woman who called herself William in college and who lived with the same woman for 39 years?
5. I did not enjoy reading her work in American Literature classes so I will not be pre-ordering the book of her letters from Amazon.
- Wednesday, 13 March 2013 22:59
Former NYC Mayor Ed Koch was famous for walking the streets and smiling at people while asking them “How am I doing.” His will was admitted to probate court this week. It left $100K to promote government and public service and left most of the remaining balance of $10 million to his sister and her children.
Several quick observations:
1. A bequest of less than 1% of the estate of a public servant to promote public service seems puny.
2. There are few, if any, other charitable bequests. So much for giving back.
3. A $10.5 – $11 million estate after being a mayor? Public service is the start of the path to enormous wealth for many.
4. The large estate reaffirms that it is easier to accumulate significant wealth when one doe not have children.
- Saturday, 09 March 2013 17:31
Viciously cruel mothers exist outside of Disney tales. An NY couple with a net worth of $250 million adopted an infant girl, Emily, from China in 1996. As part of the adoption, they promised to provide for her in their estate planning documents and to create a separate trust for her. Sadly, the adoptive father died soon thereafter, leaving his much younger wife with Emily and their 5 biological children.
The widow, who has gained notoriety by spending $33 million dollars to purchase 10 of the Thimble Islands in Long Island Sound, claimed to have difficulty with Emily’s behavior and enrolled her in a special needs school. This was after allegedly making her sleep in a tent outside for a week for misbehavior and not including her win family dinners with the other children (and after adopting and giving up another son). Eventually, the widow allowed Emily to be adopted by a different family.
Te new adoptive parents eventually learned about the trusts created when Emily was adopted and sought a court order enforcing them. The widow fought the order but an NY court held that the father had intended to include her in his estate.
1. The widow must have taken parenting classes from Cinderella.
2. The Thimble Islands are story book-esque (see the pictures).
3. Emily’s $40+ million future inheritance should buy her a lot of therapy. I suspect she will need it.