BlogRead the Latest News

 

Where Are They Now? Collecting an Inheritance.

Tuesday, 12 February 2013 14:51

An Illinois man who lived alone in a farmhouse with no running water, bathed in a creek, and did not bathe when it was frozen, died last summer of a heart attack.  His will left his estate to two actors he had never met – Kevin Brophy and Peter Barton.  Brophy’s biggest role was as a man who had been raised by wolves in “Lucan” while Barton  had been on the “Young and Restless.”  Apparently the deceased had written the actors in the past and they had responded with a thank you and watch me in my upcoming appearance note.  The deceased considered them friends.

Several points:

1.  Simple acts of kindness and respect reap dividends.

2.  For will purposes, there is a difference between eccentric and mentally incompetent.

3.  I am not sure that either Brophy or Barton would qualify for an episode of VH1’s “Where Are They Now?”

4. Lucan?  I vaguely remember it from my youth.  I certainly did not have a poster from it for years as did the decedent.  This was the poster in my teenage room.

 

 

Talking Loud and Saying Nothing

Wednesday, 06 February 2013 13:59

James Brown died in 2006.  His estate moved a step closer to settlement this week after  a federal lawsuit filed by his former business partner was dismissed.  After years of litigation, the estate was to be divided between his wife, his heirs, and his “I Feel Good Trust.”

However, his former pr woman and song writer claimed to have worked with him on the child welfare trust in the 1980s and that his intent was to leave all of his assets to it.  She claimed that the South Carolina attorney general had ignored her, that 100 attorneys had refused to take her case because they were politically intimidated, and that she has a right to be heard and to exert control over the distribution of funds.

Several points:

1.  The court was correct to dismiss the case.

2.  How a probate related case which is handled at the state level lasted 16 months in a federal court is perplexing.

3.  An estate plan can easily change multiple times over 20 years so what James Brown wanted in 1980 could differ greatly from what he wanted in 2006.

4.  It is advisable to ensure that estate planning documents reflect current wishes.

5.  Sorry, sweetheart, but no one has “a right to be heard”  nor do they have the right to exert control over funds unless they are the trustee.   You were simply channeling one of James Brown’s hits.

 

 

 

 

Planning For Pets

Wednesday, 30 January 2013 14:31

Leona Helmsley created the most famous pet trust of all time when she left $12 million to her dog (which died earlier this month).   One does not have to be a multi-millionaire to leave funds for the care of an animal after death.  However, one should be careful in selecting the right person to care for the animal – the caregiver should not be motivated solely by money.

In one instance, a maid and butler were provided free room and board as long as they cared for a cat.   The vet initially estimated the cat to be 8 years old.  The second time the vet saw the cat, he thought it was 4 years old. The third time he saw it, he estimated the cat to be one year old.  As the co-resident of a house with a cat resembling the Purina Cat Chow cat, I can attest to the physical similarity of most cats.  A more tightly drawn test pet trust wold have prohibited the maid and butler from replacing the decedent’s cat with younger versions.

With the $5.25 million unified credit negating estate tax planning for most individuals, the use of pet trusts in estate planning is one more example of estate planning going to the dogs (and cats).

RIP Stan the Man

Friday, 25 January 2013 04:28

After the tawdriness of Tuesday’s post, this piece by Joe Posnanski about Stan Musial provides nice balance.

“We all disappointed someone from time to time,” the Hall of Famer Robin Roberts said when we talked about kids and autographs. “Well, all of us but one.”

“Who was that?” I asked.

“Musial,” he said in a voice that indicated I should have already known.

Mr. Musial exuded class.  We might never see a professional athlete like him again.

 

 

Grandma Murders, Grandkids Inherit Millions

Tuesday, 22 January 2013 15:17

In 2009, a Florida woman hired a hit man to kill her wealthy husband.  Because Florida’s Slayer Statute prohibits murderers from benefiting from their misdeeds, the wife was removed as a beneficiary of her husband’s will.  The contingent beneficiaries were her daughter from a previous marriage and a trust for the benefit of the daughter’s now adult sons.  The husband’s relatives are still contesting the validity of the will which has previously been upheld.  Their theory is that the wife unduly influenced the husband into leaving his estate to her, and then the daughter and her sons, by threatening to expose his “amputee porn fetish.”

From my vantage point 1,000 miles north, I do not see how a will which leaves all of the estate to a wife, or to her children if she pre-deceases him, reflects undue influence.  The spouse is typically the beneficiary of  the other’s will.  If a spouse were to engage in coercion, I think the other spouse would next consult a divorce attorney not an estate planner.  It looks like the relatives are desperately trying to negotiate a settlement of a smaller amount.

Also from my Midwestern, suburban, and apparently sheltered vantage point, I was unaware that people could have an amputee porn fetish.

 

Getting One’s Act Together

Monday, 14 January 2013 14:28

In the making lemonade out of lemons department is this story about a woman whose 43 year old husband died after his bicycle was hit by a motorist.  The couple had unsigned wills, no emergency savings, financial accounts with passwords the wife did not know, but some life insurance.  The widow created a web site to encourage others to avoid her financial calumny and to essentially take steps to become a responsible adult by executing a will and other financial documents and by assisting with passwords and other financial knowledge.

When prioritizing allocation of financial resources to major decisions, I recommend the following:

1.  Life insurance.  Provide financial security for the spouse and children.

2. Living will and health care power of attorney.  Do not bankrupt the family because medical decisions can not be made.

3.  Will.  Clarify distributions and designate a guardian.

Somewhat related, the article did nothing to dispel my fear of riding my bike on the road rather than a bike trail.

 

 

 

Real Life Agatha Christie

Wednesday, 09 January 2013 15:37

You might have seen this piece of news. A 46 year Chicagoland man won $1 million in the lottery, but died of cyanide poisoning before he could claim the winnings. The police just started investigating the poisoning. As everyone who watches police/crime TV knows, to solve this crime look for the person with a motive. His widow claims he did not have any enemies. I have not read whether he had a will. If he did not, the winnings would pass via the statue of intestate succession.

In Ohio, if a person dies without a will, his assets will be distributed as follows:

1. If survived by a spouse, all to spouse.
2. If not survived by a spouse, all to children.
3. If survived by a spouse, but children from a previous relationship, $20K and 1/3 to spouse (1/2 if only one child from previous relationship).

Because I do not want to defame anyone, I will keep my probably wrong theory to myself. Instead, I will just say that I wonder how someone not in an Agatha Christie novel can quickly procure cyanide.

Estate Planning and Fiscal Cliff Diving

Thursday, 03 January 2013 03:58

Happy New Year.  Moving into 2013, my previously mentioned horrible prognostication abilities did not end when 2012 ended.  I did not foresee Congress making the $5 million unified credit permanent.  The unified credit is the amount of money one can give away tax free during life or at death.  Although in some fairness, I am not sure anyone in the estate planning community foresaw it either.

Quick estate planning facts from the fiscal cliff legislation:

1.  Unified credit is $5 million and will be indexed for inflation.
2.  The estate tax rate will be 40%.
3.  The unified credit is portable which means that the first spouse to die does not need a trust to utilize the credit.

For the rest of 2013, I will be out of the prediction game save for Alabama defeating Notre Dame next week (with fingers crossed that I am wrong and ND wins the National Championship).

Thomas Kinkade – Painter of Light, Writer of Illegible Will

Friday, 21 December 2012 17:24

My horrible prognostication abilities continue. If my prediction of a Romney landslide and a 9 game losing streak to end the fantasy football season were not enough, my earlier prediction of years of litigation to settle the dispute over Thomas Kinkades’s estate was also wrong. His estranged wife and his girlfriend of 6 months (although she preferred the term “soul mate”), settled their differences this week. No details were revealed.

The primary issue was the validity of 2 illegible handwritten wills made by Kinkade. Far be it from me to cast stones about one’s handwriting, but if someone is going to leave a handwritten will, it should at least be legible.

There Is Gold in the Walls! Part 2

Wednesday, 19 December 2012 13:48

Following up on an earlier post. A woman will officially inherit her reclusive first cousin’s $7.4 million estate after a court ruled that she is his only heir. After the man died, the estate auctioneer found $7.4 million of gold coins in his house.

Several points:

1. When someone dies without a will, the estate does not escheat to the state. Statutes set forth how the estate will be distributed which is generally along the lines of closest living relative.

2. Only one first cousin? That is a narrow family tree.

3. Gold was a great investment for him (actually for his cousin). Apple stock would have been better.

Delayed Parenthood and Estate Planning

Monday, 17 December 2012 14:48

With no fiscal cliff resolution imminent, it has been slow in the estate planning news world (but slammed in the estate planning practice). The New Republic had a great article on delayed parenting and the possibility of developmental issues for the children.

Viewing the article through the estate planning prism, I noted the following potential issues:

1. Parents need wills and trusts immediately. The risk of sudden death or terminal illness is greater for a 40+ year old than someone in their late 20s.
2. The trusts might need special needs provisions to protect the children’s governmental benefits.
2. Selection of a guardian to handle a child with even minor developmental disabilities is tremendously important.
4. Because the children are younger when the parents are older, parents need to rely on siblings and friends to handle their affairs until their children become old enough to assist the parents with their affairs.

Of course, estate planning assumes a certain level of personal responsibility and rational thought. I am not sure than anyone desiring children in their 60s and 70s is being responsible or acting rationally with respect to their children.

All About Domicile

Friday, 07 December 2012 13:47

This is complicated. Marilyn Monroe died in 1962 in California after she was fired from the film ‘Something’s Got To Give.” For then estate tax reasons, her executors claimed she was a NY resident. The rights to make money from her estate and likeness have been passed down to her estate heirs (and their heirs) over the past 50 years.

Several years ago, her estate sued a photographer for using her likeness for commercial purposes. A court ruled in favor of the photographer and said that there was no right to publicity at the time of her death. The State of California quickly passed a law authorizing a right of publicity and deeming it retroactive and transferable to heirs. The estate returned to court to have the previous verdict overturned. The court acknowledged the new law, but said that it was available only to residents of California. Because the estate had said that Ms. Monroe was a NY resident at the time of her death, the law did not benefit her estate.

In summary,the estate could not have it both ways – taxed as a NY estate, but utilize California laws for protection. Something had to give.

Illegal Eagles

Wednesday, 05 December 2012 16:30

Now for something complicated and fun (at least within the parameters of estate planning). An art collector died owning an art work which contained a stuffed eagle. The art was on display at the MoMA under an agreement after the federal wildlife service tried to confiscate it in the 80s.

Because the sale of dead eagles is prohibited by federal law, the estate appraisers valued the art at $0 because there is no market for it. The IRS said it was worth $15 million. When the estate rejected that valuation, the IRS played hardball and said it was worth $60 million and levied penalties for undervaluing it plus interest. The estate tax alone on this art would have been $27 million. The estate and IRS finally settled the matter when the estate donated the piece to MoMA and the IRS dropped the estate tax issue.

Couple of points:

1. The family had not benefited from this art for 20 years due to the previous agreement to keep it on display.

2. I do not agree with the assessment that art with no market is worth $15 million. Assets are worth what a willing buyer and willing seller agree upon. If there are no buyers, there is no value.

3. The collector’s estate had paid $470 million in estate taxes already and had sold $600 million of art to do so.

4. The author is wrong about the charitable deduction. The estate did receive a charitable deduction for the value of the art work which is why ultimately there was no tax on it.

5. Never pick up an eagle feather. It is illegal to do so and subject to a $25,000 fine. Unless you are a Native American or a member of the Screaming Eagle division of the US Army.

WVXU Broadcast

Friday, 30 November 2012 17:32

Forgive the self-promotion.  I will be on Chris Desimio’s “On the Money” program on WVXU tomorrow morning discussing changes to estate tax laws.  The segment will be here soon thereafter.

Thank you to Chris for having me on the show.  It is always fun.

 

Even Rappers Need Wills

Thursday, 29 November 2012 01:48

Rapper Nate Dogg’s $200,000 estate moved one step closer to being settled after his wife (step-mother to his children) and his mother ceded control of the estate to a neutral 3rd party at the request of his children.  Mr. Dogg died in March 2011 without a will at the age of 41, leaving a wife and 6 children whose ages are unascertainable in a cursory web search.  His wife and mother had sought to be appointed co-executors, but his children believed they were only motivated by financial gain and did not have the best interest of the children at heart.

Lessons to be learned:

1.  Everyone, even rappers, need a will.  The issue of executors would not have arisen because the will would have appointed someone to serve in that role.

2.  A funded trust would have been better because this entire dispute, or at least the financial end of it, might have remained shielded from the public.

3.  $200K estate for a rapper?  The music business is tough for everyone this century.  However, 6 children, a socially appropriate level of bling, and no solo releases for 9 years could drain assets quickly.

New Web Page

Wednesday, 28 November 2012 02:20

My revamped web page is up and running (but then you probably know that if you are reading this).  Content will change once we have some Congressional direction on estate tax laws.

Thanks to Justin at Kesil Consulting for the clean look, quick work, and the web feedback.  www.kesilconsulting.com.

Death Better than Divorce?

Monday, 26 November 2012 17:45
Schmuck of the year finalist.  An NY man and woman were married for 30 years.  8 years prior to his death, man obtained an uncontested divorce on grounds that his wife abandoned him.  Man continued to live with woman for duration of his life.  Wife did not discover divorce documents until cleaning up his finances post-death.  Wife claimed that they had been happy.  She was aware that he had tried to sell a house previously without informing her.

As a widow, she was entitled to his pension and perhaps other benefits.  As an ex-wife, she was not entitled to those and he could leave them to his children (or mistress).  She was able to successfully overturn the divorce and fend off the claims of his children from a prior marriage.

Lessons to be learned:

1.  If a spouse is ill, it behooves the other spouse to stay married because a widow is generally better positioned financially than an ex-wife of the husband/ex-husband.

2.  If a spouse tries to sell a house without telling the other spouse, the trust level in the marriage should become zero.

3.  One woman’s apparently happy marriage can be another man’s misery.

As God as My Witness, I Thought Turkeys Could Fly

Wednesday, 21 November 2012 17:44

Happy Thanksgiving.

Dahling, It’s the Fiduciary that Matters

Monday, 19 November 2012 17:43
Zsa Zsa Gabor’s daughter recently convinced the LA county probate court to invalidate the power of attorney held by Zsa Zsa’s husband because  he was abusing it.  Her financial affairs are now subject to probate court supervision.
To avoid the rigors of a guardianship and probate court supervision, an individual should have a financial power of attorney and health care power of attorney.  However, selecting the person to manage those responsibilities is important.

What we can learn from Zsa Zsa’s situation is that a husband is not always the best choice to serve as fiduciary  especially if he if he wants the 94 year old to have a baby, has adopted several adult men, and has claimed to father Anna Nicole Smith’s daughter.

Will Rogers on Death and Taxes

Sunday, 18 November 2012 17:43

With all estate planning stories focused on the looming  fiscal cliff, and President Obama wanting to gouge the wealthy for the sake of gouging the wealthy, this Will Rogers quote seems appropriate:

“The only difference between death and taxes is that death doesn’t get worse every time Congress meets.”

Contact Info

image

Address

Law Office Of Jay Brinker
1 E. Fourth Street - Suite 900
Cincinnati, OH 45202

Email

[email protected]

Phone

(513) 665-4888

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.