- Tuesday, 29 November 2016 08:22
A Bobbi Kristina Brown update. An Atlanta judge ruled two weeks ago that Nick Gordon, the boyfriend of Bobbi Kristina Brown, is liable for $36 million in damagesto her estate and to her father, Bobby Brown, for allegedly causing her death by providing her the drugs in her body at the time of her death and for assaulting her. The judge determined the amount of damages after Gordon stopped appearing in the case a year ago and the estate was awarded a default judgment (because Gordon stopped participating in the case) in September.
Only two points:
1. Gordon does not have the funds to pay the judgment and will likely declare bankruptcy to avoid paying them.
2. There is no word on when Bobby Brown will be held liable for providing drugs to, and ruining the career of, Whitney Houston.
- Tuesday, 29 November 2016 08:17
A couple of quick thoughts:
1. Of course this does not work for people dying a sudden, unexpected death.
2. As your tastes change, you would have to revise your list lest you be stuck listening to “Funky Town” while dying.
3. One could skip the playlist idea and simply play Sufjan Steven’s “Carrie and Lowell” and “Casmir Pulaski Day
” on repeat.
4. Thankfully this idea was not idea was not around when I was younger or I would have had Head East’s “Never Been Any Reason
” on my list although the lyric “save my life going down for the last time” would be tastelessly appropriate.
- Friday, 04 November 2016 11:08
I subbed for Paul Daugherty’s The Morning Line blog in the Cincinnati Enquirer again this morning. I am critical of UC’s Tommy Tuberville and listed some possible replacements. I hope you like it.
- Wednesday, 02 November 2016 15:24
Bill Cornwell lived in a Greenwich Village brownstone with his same sex partner for 50 years. When he died two years ago, his will left the building and all of his possessions to his partner. However, the will was only witnessed by one individual while NY law requires two witnesses. Without a valid will, his estate will pass to his closest living relatives who are his nieces and nephews who recently sold the building for $7 million. The partner has since filed suit trying to prove that he and Mr. Cornwell were actually married, although they were not, so he can be considered the closest heir.
So many points and such short attention spans:
1. All wills require two witnesses not related to the individual and who will not receive any assets under the will.
2. Using a DIY will kit could lead to problems with properly executing wills (among other issues)
3. The legal arguments made by the partner verge on stupid. One of them is that even though they lived in NY, which does not recognize common law marriage, they bought a dog in Pennsylvania in 1991 as a symbol of their commitment to each other and because Pennsylvania used to recognize common law marriage they should be considered as married.
4. The 85 year old partner would be better off dropping the law suit and accepting the offer of the nieces and nephews to live in the apartment for 5 years at a monthly rental of $10 and receive $250,000 upon the sale of the building.
5. The entire problem could have been avoided if they had simply married each other once gay marriage became legal.
6. One niece claimed, apparently with a straight face, that her uncle did not want his partner to inherit or he would have properly executed the will. She also suggested that perhaps the men were just friends or great companions. The address of the rock under which she lives is unknown.
- Wednesday, 02 November 2016 15:15
In lieu of much newsworthy, I will resort to the evergreen story of the seemingly penniless senior citizen who left a large bequest to a charity in his will. Ken Millen was born in Aberdeen, WA, attended Grays Harbor College there, worked as shoe salesman until the store went out of business in the ’80s, and always lived in the house in which he was born. He inherited some funds 20 years ago from a brother who was an attorney in the South. When Millen died last year, he left some crappy personal property, including his 1979 car, to his neighbors who treated him like a family member. He left the remaining $1 million to his alma mater. The neighbors ended up hauling most of the personal belongings to the dump because they were worthless.
A few non-legal points:
1. As heart warming as these stories are portrayed, they are actually somewhat bothersome in that an individual who was treated decently and warmly by neighbors for years eschews leaving them any funds in lieu of giving it to an institution he attended 65 years ago but likely did not have much present contact with.
2. Estate planning attorneys need to do a better job with clients without living relatives to guide them to leaving some meaningful assets to important individuals in their lives rather than faceless institutions.
3. Mercifully Grays Harbor College does not have a football team so the bequest cannot be wasted on an unnecessary scoreboard.
4. To quote Aberdeen’s most famous resident: “I found it hard, it’s hard to find, Oh well, whatever, never mind.”
- Wednesday, 05 October 2016 14:43
NY recently passed legislation permitting people to be buried with the remains of their pets. Only four states permit humans and pets to be buried together. Ohio law is silent on this matter although some cemeteries bury both humans and pets in separate sections. There is no word on whether Jennifer Lopez intends to be buried with Casper Smart.
- Wednesday, 05 October 2016 14:32
Hillary Clinton announced an updated estate tax proposal today. After previously supporting an increase in the estate tax rate from 40% to 45% and decreasing the amount of tax free assets to $3.5 million, she now wants to tax estates exceeding $10 million at 50%, estates exceeding $50 million at 55%, and estates exceeding $500 million at 65%. She also wants to remove the stepped up basis provision for estates so appreciated assets would also be subject to capital gains tax at death.
Two quick points without being too political because the proposal speaks for itself:
1. Apparently Hillary believes the Senator Warren adage that “you did not build this” so we are going to tax it mantra.
2. No word from her billionaire buddies Soros, Zuckerberg, Gates, and Buffet on how they feel about the government possibly taking 65% of their wealth and, frankly, I don’t give a damn about them.
- Friday, 16 September 2016 08:29
A former University of New Hampshire librarian who lived frugally, left his entire $4 million estate to the university. The UNH promptly fulfilled his mostly unrestricted bequest by allocating $100K to the library where he worked (some might say toiled) for 50 years, $1 million for a video scoreboard for the football stadium, and $2.5 million for the career center to presumably assist students with worthless majors like women’s studies, anthropology, and fine arts find jobs other than as baristas.
Several points only marginally associated with estate planning:
- By leaving his entire estate to charity, the former librarian will not incur state or federal estate tax.
- Even though he spent the last year of his life in an assisted living facility watching (and finally learning about) football, I highly doubt that he would approve of UNH spending $1 million in his name on a video scoreboard for their minor league football team (avg attendance 6,000 last year). I doubt the absence of a video scoreboard is keeping people away.
- Although assisting students with job placement after they selected useless majors is a questionable use of one’s savings, it is no less worthy than leaving money to a library in the 21st Century when most functions of a library are available on on-line (except for providing a physical warm or cool space for the homeless during the Winter or Summer).
- Friday, 09 September 2016 07:32
I wrote Paul Daugherty’s The Morning Line blog again yesterday. I covered UC’s Big 12 candidacy, Notre Dame’s quarterback situation, and myriad other topics including Bruce Springsteen’s forthcoming autobiography. I hope you enjoy it.
- Tuesday, 23 August 2016 16:46
A Penn State professor was allegedly murdered last week by the woman to whom he offered shelter and her friend. The professor was allegedly pushed off a cliff because he had recently revised his will and they thought they would benefit from his death. The woman was also miffed because he had criticized the parenting of her child. One of the reasons cited by the police in their arrest of the couple was they were “known drug users.”
One legal point and two “I can’t believe this” points”:
1. Most states, including Ohio and Pennsylvania, have “slayer statutes” which preclude murderers from benefiting from the will of someone they murdered.
2. It is incredibly presumptuous of the woman and her friend to assume that they were named as beneficiaries of the professor’s new will.
3. If “known drug user” is a marker for a criminal, then half of the adult population of Colorado are suspects for crimes there.
- Wednesday, 03 August 2016 21:38
Stepping away from celebrities for a minute and focusing on estate laws, yesterday the IRS issued proposed regulations to minimize valuation discounts in estate planning. In a nutshell, the regulations prohibit taxpayers from dividing property between family members and then claiming their proportionate shares are not worth the exact proportion because that small proportion does not have control of the property. Wonky? Yes.
Three small points:
1. These regulations have been bandied about for 25 years.
2. From a practice viewpoint, I have never completely bought into the idea of valuation discounts for marketable securities transferred to an LLC or partnership solely for the purpose of obtaining a reduced value for estate tax purposes.
3. Nonetheless, this issue seems to be one for Congress to address through legislation rather than one more edict from a lame duck (re: imperial) administration to issue in its waning days.
- Sunday, 31 July 2016 17:25
Mel Simon owned the Indiana Pacers with his brother, Herb, for 16 years. After the Malice in the Palace in 2004, the Pacers started losing money and Simon became disenchanted with his ownership of the team. He sold his interest to his brother in a very quiet deal that was two years in the making. The terms included being released from various personal guarantees. Simon died shortly thereafter of pancreatic cancer. The IRS determined that the deal was so favorable to his brother that his estate owes a gift tax of $21 million. His widow has sued the IRS for a refund of the gift tax paid.
Several quick points:
1. An individual may give away $5.45 million during his life before he has to start paying gift tax.
2. The gift tax rate is 40%.
3. The donor is the person responsible for paying the gift tax.
4. This deal between brothers sounds complicated. It is doubtful that one brother would intentionally give the other $83 million.
5. The widow can afford the tax bill – Simon’s estate was valued at $2 billion because of his pioneering development of shopping malls.
6. Ironic that Simon’s loss of interest in basketball ownership is tied to the Malice in the Palace. Ron Artest – the gift that keeps on giving.
- Sunday, 31 July 2016 17:17
In addition to a dearth of worthy estate planning news, it has been a busy and awesome two weeks. Two concerts, a soccer game in Columbus, business trip to Cleveland, and usual bike rides. With all of that, Jack’s smile is the highlight of the past two weeks. Post to follow.
- Thursday, 14 July 2016 20:56
Several very brief points:
1. Aniston’s mother was not required to leave any assets to Aniston by law. She may leave them to whomever she chooses.
2. Aniston certainly does not need any of her mother’s money.
3. Like any 40-something year old, it is doubtful that Aniston would want/need any of her mom’s tsochktes.
4. It is refreshing to read an article about Aniston that does not involve pregnancy speculation although it does mention Brad Pitt.
- Monday, 11 July 2016 23:21
Gosh, times are slow in the newsworthy estates and trusts area, except for the conga line of people claiming to be heirs of Prince. Reluctantly resorting to fiction for material, “The Nest” by Cynthia D’Aprix Sweeney is on many best books of summer lists. It has several estate planning lessons which can be gleaned from the following plot facts (all of which are in the first 40 pages so hopefully I not spoiling anything for anyone who wants to read the book).
A father created a trust for his four children. The trust was to be distributed when the youngest child reached the age of 40. His wife had the power to invade the trust in the event the children needed the funds earlier. One of the children had a power of attorney from his husband which allowed him to mortgage their vacation property without the husband knowing about the mortgage (trust me, I got the pronouns correct). Another child had a legal predicament which resulted in his mother lending him the entire proceeds of the trust to bail him out and hoping that he would re-pay the amount (called “the nest” by his siblings).
Points to be learned:
1. One should never give a power of attorney to a non-aged spouse unless it is contingent on disability. The potential for abuse is too great otherwise.
2. This trust should have divided into separate shares either at the conception or when the children were in their early 20s. Each child could have then borrowed from his or her share only, if necessary, rather than from the entire trust.
3. The wife/mother of the children should not have had the power to distribute all of the funds without being held to a prudent investor standard.
4. Of course, if there had been good estate planning there would not have been a novel, nor would I have a blog.