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21st Century King Lear

© PatrickMcMullan
Photo – Owen Hoffmann License:  Fair Use/Education (from linked article)

Herbert Neumann is the trustee of trust which owns 60 works of art worth an estimated $50 million. The most valuable piece is “Untitled (Tyranny)” by Jean-Michel Basquiat. The trust was created by Neumann’s brother for the benefit of Neumann’s 3 daughters. Now, one of the daughters, Belinda Neumann-Donnelly, is suing her father in his capacity as trustee to sell all of the artworks. She claims that the art will be impossible to divide equitably and that she needs funds for her family’s “significant housing, litigation, and education expenses.”

The same daughter has another lawsuit, presumably the source of the significant litigation expenses, against her father involving the sale of another Basquiat painting, “Flesh and Spirit,” formerly owned by her mother who died in 2016 that sold for $30.7 million last year. She claims that her father’s threat to contest the sale of the painting depressed the sales price. Oddly, she lives in the same two family building in NY as her father.
Several points:
1. The lawsuit to sell the paintings owned by the trust is likely premature because the trust likely provides that it will distribute its assets upon the death of Neumann.
2. Neumann’s wife, who owned the painting sold for $30.7 million, disinherited him from her will alleging he abused her. I am surprised that he did not elect against the will which would entitle him to 1/3 of his wife’s estate including part of the painting sales proceeds.
3. If Neumann’s wife gave the painting to the daughter before she died, as some articles insinuate, the wife would have been required to file a gift tax return and pay gift tax on nearly $25 million and the daughter would have to pay capital gain tax on almost the entire sales amount (Mrs. Neumann only paid $15K for the painting).
4. The emperor truly has no clothes because Basquiat paintings look like the drawings of a bored high school student on the back of his spiral notebook.

Trouble Don’t Set Up Like Rain

Marcelle Harrison’s mother and step-father, both of whom were Barbadian immigrants, purchased a house in Boston in 1970 for $23K. Her mom died in 2009. Her step-father died without a will two years later.
 
Now, Harrison and her multi-generation family are being forced to leave the $1 million home because they are not the legal owners. Because her step-father died without a will, his closest living relatives, nieces and nephews who live in Barbados, will inherit his estate. A state representative who lives across the street said “It shocks the conscience to think that this low-income, Barbadian family could be displaced, really out of the blue.”
 
A few points, some of which I have made before:
 
1. The legal outcome is correct – under the statute of intestate succession, which applies when there is no will, Harrison has no claim on her step-father’s estate no matter how long he was married to her mother.
 
2. Thoughtful estate planning is important for everyone, but even more so for second marriages and blended families.
 
3. The local politician might find this outcome shocking, but I am not shocked that a Massachusetts politician would use identity politics to describe the problem while being ignorant of the law.
 
Photo Credit:  Jessica Rinaldi/Boston Globe
License:  Fair Use/Education (from linked article)

This Keeps Me Employed

Comic License:  Nick Galifianakis/Washington Post

License:  Fair Use/Education

Feeling Low Cotton

Gerald Cotten ran QuadrigaCX, one of Canada’s largest crytopcurrency exchange companies.  Last month, the company announced that 30 year old Mr. Cotten died in early December of complications from Crohn’s Disease while building orphanages in India.  The company also announced that $140 million of cryptocurrency was unavailable because all of the currency was stored on a laptop that only he had access to and no one knew the password.   There is concern that the cryptocurrency will be locked on the laptop forever.  However, digital forensic experts have questioned whether the currency is actually on the laptop and whether it was moved previously.

One planning point, one investment point, and a lot of shade.

1. This is a classic instance of making sure that your heirs can access your digital accounts after your death.  I advise my clients to write down their passwords to prevent heirs from being locked out after death.

2. Cryptocurrency investments can be dangerous enough without trusting them to a twenty-something operating on a laptop out of his house in Nova Scotia. 

3. Not to be a conspiracist, but I do question the legitimacy of reports of a young man dying of Crohn’s disease (mortality rate of 1%) while overseas doing charity work with the death reported a month later, and $140 million possibly missing and not simply locked on a computer.  Feel free to call me a cynic, though.

 

 

Photo Credit:  Benoit Tessier/Reuters

License:  Fair Use/Education (from linked article)

Scourge of Our Times

Newtown police chief, Tom Synan, was featured in a video on USA Today’s sitea about his work on the front line combating opioid addiction and treating it as an illness and not as a crime. I am honored to call him a friend.

 

 

 

Photo credit:  USA Today (actually it is a video)

License:  Fair Use/Education (from the linked article)

Identity Theft?

Jeanne Calment has been considered the world’s longest lived person since she died at the age of 122 in 1997. She allegedly smoked until she could not light a cigarette without assistance. Recently, a Russian gerontologist and a Russian mathematician have questioned her longevity and floated the theory that Calment stole her mother’s identity for the purposed of avoiding French inheritance taxes in the 1930’s. Their theory is that she did not look or act that old. The result is that Calment was only 99 when she died.

Only three points:

1. I always enjoyed the part of Calment’s bio where she sold her apartment when she was 90 to a man who agreed to pay her a monthly sum until she died. She outlived him by two years so he wound up paying 2X for the real estate.

2. Like many points of French governance, the estate tax laws are complicated. Nonetheless, the tax rates are not so confiscatory that compliance merits identity theft as a means of avoidance.

3. Is there any type of disinformation campaign that Russians will not engage in?

Photo Credit:  Reuters

License:  Fair Use/Education

Happy New Year (Belated)

Best wishes for the new year. And no, Jack is not taller than me. 😊

Merry Christmas

Best wishes from our family to yours.

End of the Year TML

I subbed for Paul Daugherty’s The Morning Line blog in the Cincinnati Enquirer yesterday. I reviewed the year in sports with a Cincinnati perspective. I hope you like it.

 

Photo Credit:  Sarah Brookbank for Cincinnati Enquirer

License:  Fair Use/Education (from linked article)

Melvin and Howard

Melvin Dummar died this week. He was famous for having been named as a 1/16th beneficiary of Howard Hughes’ unwitnessed handwritten will which was known as “The Mormon Will.

Dummar allegedly found a disheveled Hughes near a Nevada brothel and gave him a ride to The Sands hotel in 1967. After Hughes’ death in 1976, an unknown man delivered a letter to Dummar, who was then living in Utah, for forwarding to the Church of Latter Day Saints. Before delivering it, Dummars steamed it open and saw that he and the Mormon Church were listed as beneficiaries of the will. Hughes was not a Mormon, but Dummars was. The will was one of 40 wills purportedly made by Hughes none of which were deemed to be valid.

A valid will for Hughes was never found resulting in his fortune benefitting distant cousins and other relatives. Hughes reportedly did not want his relatives to benefit from his fortune. Dummar’s alleged encounter with Hughes was made into the award winning movie, “Melvin and Howard,” in 1980.

Several points:

1. As a single man with no children and no siblings, Hughes definitely should have prepared an estate plan to distribute his billions.

2. As a man who dated Katherine Hepburn, Ava Gardner, and Gloria Vanderbilt among others, it is doubtful that Hughes frequented a brothel hours from Las Vegas although the uncut hair and fingernails might have been a turn off..

3. If this incredible story were not already made into a movie, it screams of material that needs to be made into a movie.

Photo Credit:  United Press International

License:  Fair Use/Education (from linked article)

(Not) Gentle on His Mind (Part 2)

I previously noted that Glen Campbell’s 3 children from his second marriage were contesting his will which he signed in 2006. The will omitted them, likely due to their supporting their mother during her divorce from Campbell and later suing him over the publishing rights she received in the settlement. His 2001 will also omitted them. The children recently dropped their lawsuit.

A few points:

1. The lawsuit would have been difficult to win because Campbell made both wills long before he went public with his Alzheimer’s diagnosis.

2. Campbell’s estate was recently valued at $1.2 million which is way less than the original estimate of $50 million.

3. If the omitted children were successful in challenging Campbell’s estate plan, they would have inherited $100K each tops.

4. The money for recording artists is in the writing and publishing not the performing. Campbell generally performed songs written by others.

5. Three divorces, 8 children, and years of cocaine use are never conducive to accumulating wealth.

Photo credit:  Larry McCormack/The Tennessean

License:  Fair Use/Education (from linked article)

Mini-Me and Maximum Bill

Verne Troyer is the actor famous for playing Mini-Me in the Austin Powers movies. He committed suicide by alcohol poisoning in April. After ingesting the alcohol, he called 911 and told dispatchers he wanted to die. He was rushed to the hospital but died 3 weeks later. He left an estate valued at $150K. Just recently the hospital which treated him filed a claim against his estate for $360K.

Three small points:

1. In Ohio, a creditor has six months from the date of death to file a claim for payment against the estate. If the claim is not made, the estate does not have to pay the debt.

2. Debts must be paid before the beneficiaries receive any assets. Troyer’s heirs will not receive anything from his estate.

3. If there are insufficient assets to pay debts, the debts die with the decedent. The heirs are not responsible for them.

4. No snark when someone commits suicide.

Photo Credit:  REX/Shutterstock 

License:  Fair Use/Education (from linked article)

If It Is Not One Thing, It Is Something Else

 

Your chances of death rated by activity. Climbing in the Himalayas is definitely a death wish, as is base jumping (and its cousin, wing suit flying). As a cyclist, I am bummed out to see the somewhat high risk of death for cycling.

Be careful out there. And prepare a will.

 
 
 
 
 
 
 
Source:  besthealthcaredegress.com
License:  Fair Use/Education

TML Again

I subbed for Paul Daugherty’s The Morning Line blog in the Cincinnati Enquirer again today. I touched on some recent sports deaths and firings, the basketball jerseys honoring Prince, and reviewed my favorite book of the year. I hope you enjoy it.

 

Photo Credit:  Unknown

License:  Fair Use/Education (from linked article)

 

 

 

Tasered and Confused

A local story has a probate court angle. The City of Cincinnati has agreed to settle a lawsuit brought by an 11 year old shoplifter who was tasered after running from an off duty police officer. The young girl, who had been caught and warned previously for stealing from the same store, had $53 of stolen merchandise on her. She will receive $220,000 from the city and $20,000 from Kroger for the indignity of being tasered.

Several points and one prediction:

1. Because the girl is a minor, the settlement will be subject to probate court supervision until she turns 18.

2. Funds may only be spent with the approval of the probate court and then only for her mental health to overcome the trauma of being tasered.

3. She will have unrestricted access to the funds when she turns 18.

4. Call it more than a hunch that the number of shoplifting incidents at Kroger without repercussions will increase dramatically.

Photo Credit:  Albert Cesare/Cincinnati Enquirer

License:  Fair Use/Education (from linked article)

Not Misty’s Foal

 
At the risk of becoming CNN and MSNBC and reporting all President Trump all of the time, Stormy Daniels released a memoir last week titled “Full Disclosure. ” I could not care less about her relationship with President Trump 12 years ago, but I am interested in her describing her recording her “last will.” After the Wall Street Journal reported the existence of her non-disclosure agreement with President Trump, Daniels received threats which caused her to describe on video her insurance policy and her wishes with respect to the distribution of her assets.
 
A few points:
 
1. Most wills must be written and witnessed.
 
2. Oral wills are not recognized in most states.
 
3. Ohio only recognizes oral wills made upon one’s deathbed and written down within 10 days.
 
4. Sad that an attorney who wants to become President represents a woman who cannot properly prepare a will.
 
Photo Credit:  St. Martin’s
License:  Fair Use/Education (cover of book discussed) 

You Say Tomato, I Say Tomahto

The New York Times just published 15,000 words about the estate and gift tax strategies President Trump’s father, Fred Trump, used to transfer his billion dollar real estate empire to his children more than 20 years ago. NYT reporters accessed public records and had others provide them confidential documents such as estate and gift tax returns. The point of the NYT piece is to disprove President Trump’s claim that he is a self-made man by claiming he received $413 million from his dad. They do not note that represents only 1/7 of his current net worth as reported today by Forbes.

A few points:

1. Even though the NYT used the terms “tax dodger,” “sham,” “dubious schemes,” and “improper,” to describe Fred Trump’s planning, the actual planning strategies he used were legitimate.

2. Fred Trump utilized valuation discounts and special trusts called GRATs to greatly reduce the gift and estate taxes owed on the transfer of his assets to his children.

3. Any impropriety on the transfers is due to the appraisal values for the real estate which seemed low in light of later sales.

4. Try as the NYT might to implicate President Trump in any impropriety, any wrong doing belongs to the person making gifts, i.e. Fred Trump, not the person receiving the gifts.

5. Am I the only one to notice that only confidential tax returns of Republicans are leaked to the press?

Photo Credit:  Trump Campaign via New York Times

License:  Fair Use/Education (from linked article)

This Happens Once In a Career

Elaine Chao, the U.S. Secretary of Transportation, used my conference room today while waiting for a meeting to start down the hall. She was in town to discuss transportation issues with Congressman Chabot and representatives from Uber, Red Bike, and the Chamber of Commerce among others. She and her staff were incredibly gracious.

COPY

Robert Indiana, the artist known for the iconic pop art image, LOVE, died in May at the age of 89. Mr. Indiana had moved to an island off the coast of Maine in 1978 where he continued to generate highly derivative images of his most famous piece, including HOPE for President Obama’s 2008 campaign.
For the last five years of his life, Mr. Indiana paid a caretaker $250K annually to assist him. He also gave the caretaker power of attorney. The caretaker withdrew over $600K from Mr. Indiana’s bank accounts supposedly at his direction.

The estate is supposed to turn Mr. Indiana’s dilapidated house into a museum to display his works. The estate is now embroiled in litigation over the withdrawn cash and whether Mr. Indiana was actually producing new art at the time of his death.

A few points:

1. Situations involving wealthy elderly individuals with no close family are always difficult because there is so much potential for financial exploitation.

2. Sometimes the caretaker is the best person to serve as attorney in fact if there are no relatives and the individual has outlived all of his friends.

3. Still, $600K of withdrawals for an individual living on an island off the coast of Maine with no place to spend the money seems excessive.

4. The last thing our country needs is another remotely situated vanity based museum dedicated to an artist of modest reknown.

5. AC/DC apparently copied Mr. Indiana’s playbook of recycling/copying prior work to earn great wealth.

Photo Credit:  Johnsonville Sausage 

License: Fair Use/Education (from linked article)

The Morning Line Again

I subbed for Paul Daugherty’s The Morning Line blog in the Cincinnati Enquirer on Friday. I covered some moves by the Bengals, the UC-Miami game this weekend, and the Reds futility. I also commented on the shootings on Fountain Square on Thursday.  I hope you enjoy it.

Contact Me

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.