- 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.
- Monday, 11 July 2016 23:15
Just returned from a four days in California Wine Country with Janice. Post to follow soon.
- Saturday, 02 July 2016 11:02
I subbed for Paul Daugherty on his The Morning Line blog yesterday for the Cincinnati Enquirer. I reviewed the best and worst of the first half year in sports. I hope you enjoy it.
- Monday, 27 June 2016 21:59
Scraping a bit for probate and will related news this week. William “Refrigerator” Perry shot to stardom as the large defensive lineman who sometimes played running back for the awesome 1985 Chicago Bears. He allegedly could dunk a basketball even though he weighed 300 pounds. He now lives in South Carolina under a legal guardianship created by his brother when he was near death 7 years ago. Fridge’s son wants to remove the brother as guardian while a court has stated that the guardianship can be removed if Fridge files the appropriate paperwork. Fridge, meanwhile, spends his days drinking with various friends, walking assisted by a walker, and generally not taking care of his health.
1. Any interested party can apply to be the guardian of another with the supporting medical documentation. The son could have applied to serve as guardian in 2009 but did not.
2. Guardians are compensated for their services. Despite the son’s allegations, the $1,250 annual compensation received by the brother is not the reason he continues to serve as guardian of Fridge.
3. A guy who starts drinking first thing in the morning and is unmotivated to file paperwork to remove a guardianship likely still needs the protection of the guardianship.
4. This has bothered me for 30 years. It has always been reported that Fridge could dunk a basketball. How hard would it have been to ask him to do it? It is not as if basketball courts are as scarce in this country as bobsled courses.
- Tuesday, 21 June 2016 22:03
Stretching to make several points:
1. In Ohio, a spouse can elect to receive 1/3 of the assets passing through the probate estate even if omitted from the will.
2. A former spouse has no statutory rights so Taylor was wise to finalize the divorce prior to his death.
3. I am surprised that someone with Taylor’s reputation for wild behavior was able to organize his affairs to divorce his long missing spouse and prepare a will omitting her, just in case, prior to his death.
4. $10 million is a lot of money for the drummer of the ‘worst band in the world”. Of course, the Kardashians are Exhibit A that talent and net worth are not correlated.
- Thursday, 16 June 2016 21:16
A woman was on a Jetblue flight to Orlando to attend the funeral of her grandson who was murdered last weekend by the Islamic terrorist. A Jetblue flight attendant whispered to each passenger about signing a sheet of paper to show their support for her. She wound up needing many pieces of paper because people were writing paragraphs of compassion for the grandmother. When the woman left the plane, every single passenger hugged her.
Read the whole article. Have your Kleenex at hand.
- Sunday, 12 June 2016 23:13
Just returned from a week in the Caribbean. The British Virgin Islands are special. Post to follow soon. Meanwhile, here is the family pic from Cooper Island Beach Club.
- Thursday, 26 May 2016 21:24
Viacom and CBS President, Sumner Redstone, is back in the news this week. He removed Phillipe Dauman and George Abrams, who are directors of Viacom, as Trustees of one of his trusts. They are contesting their removal by alleging he is incompetent. In a huge twist of irony/self-preservation/whatever you want to call it, only six months ago they testified he was competent to remove a girlfriend as his health care proxy.
Three brief points:
1. The stakes in the previous battle involved who could make his health care decisions if he could not (while the real plot was whether he could change his will to disinherit his former girlfriend) while these stakes are who gets to control Viacom and CBS after Redstone’s death.
2. I think if Redstone is in a wheelchair, being fed by a feeding tube, and able to communicate only through an aide now, and was in the same condition six months ago, he was likely incompetent at both junctures.
3. Dauman and Abrams have reaped what they have sown. Being close to Redstone is like having an alligator as a pet – it might seem cool, but eventually it (i.e. he) will devour you.
- Monday, 23 May 2016 21:55
Hillary Clinton’s recently released financial disclosure statement reveals that she and her husband both created a qualified personal residence trust in 2010 and transferred ownership of their NY home to it. They did not transfer their more expensive Washington DC house to a similar trust.
Several quick educational points:
1. A qualified personal residence trust allows them to transfer the house at a discounted gift tax value based on how long they wish to reside in the house and the current interest rates.
2. For example, if they decided to live in the house for the next 20 years (and not die), they would be able to transfer the entire $1.7 million house to Chelsea while only valuing it at $400K for gift tax purposes.
3. Future appreciation is also excluded from their estate.
4. They would have been wise to transfer the DC property via this technique because that house has doubled in value while the NY property has only increased nominally.
5. While this estate planning technique is available to everyone, I find it hypocritical that a woman campaigning for higher estate taxes and other taxes in the name of the greater good does everything she can to avoid those taxes.
- Tuesday, 17 May 2016 20:59
When a Richmond, VA woman died last week, her obituary read
“Faced with the prospect of voting for either Donald Trump or Hillary Clinton, Mary Anne Noland of Richmond chose, instead, to pass (into the eternal love of God).
No pithy comments, she already made one.
- Sunday, 15 May 2016 21:14
The reports of a settlement between Sumner Redstone and Manuela Herzer over her replacement as his health care proxy were premature. There actually was a brief trial over the dispute which ended with the judge dismissing Herzer’s suit to remain as his health care decision maker. The judge relied on a 7 minute deposition of Redstone in which the few intelligible sentences he uttered were “Manuela is a ****ing bitch” (twice) and “I want Manuela out of my life. Yeah.” Of course Herzer’s attorneys have vowed to appeal.
1. This case remains about Redstone’s will which he changed at the same time as his health care power of attorney. Herzer was reportedly to receive $70 million at his death.
2. Herzer, who smartly declined an offer of marriage from Redstone, has reportedly received $75 million in gifts from him while the woman who did become his second wife only received $10 million because she signed a pre-nup.
3. While Redstone, like the recently deceased Prince, believes he will live forever, at least he has planned for his death by having a will and various trusts.
- Sunday, 08 May 2016 22:00
The ever not so eloquent, Snoop Dogg, was asked this week if he had a will or estate plan. His NSFW response was, “I don’t give a f— when I’m dead. What am I gonna give a f— about? This goin’ on while I’m gone, you know?”
And continuing in his non-King’s English, he added, “Hopefully, I’m a butterfly, I come back and fly around and look at all these motherf—–s fighting over my money and s–t, like, ‘Look at all these dumb motherf—–s.’ Ha!”
Only four sentences, but so many points. Minimizing them:
1. Snoop can make life easier for his loved ones if he spends a bit of time deciding who should inherit the wealth accumulated from his questionable talents. He could eliminate any people claiming to be his illegitmate child by naming people in his will.
2. Prince reportedly has had 900 people come forward for DNA testing claiming to be his haIf-siblings while anyone who can establish that he is Prince’s child, will hit the jackpot and inherit all of Prince’s wealth.
3. Raise your hand sheepishly if you think Snoop has fewer illegitmate children than Prince. You would be wrong.
4. I doubt Snoop views his family as loved ones when he refers to them as “dumb motherf—–s.”
5. Maybe it is just me, but if I were reincarnated, unlike Snoop I would prefer to return as something more fierce and substantial than a short lived insect with pretty wings.
- Friday, 06 May 2016 09:36
Paul Daugherty allowed me to guest write his TML Blog for the Cincinnati Enquirer. I covered today’s sports news plus a few UC sports issues. I hope you enjoy it.
- Wednesday, 04 May 2016 21:27
When Britney Spears had her breakdown in 2008 (think shaved head and window smashing), her father and attorney became her conservators
. In Ohio, they would be known as guardians. They manage both her physical well being and her finances. As such, they make sure she takes her medicine for her unspecified illness as well as manage her career.
In recent years, Britney, who has been described as shy has not testified at hearings about continuing the conservatorship. She reportedly is only interested in seeing her sons. Her father receives 1.5% of the $17.5 million annual revenues from her Planet Hollywood shows and the same cut from the merch sales. Her court appointed attorney has received $2 million in fees since 2008 and the other conservators have received $6.7 million.
Three brief points:
1. Britney clearly needed someone to assist her in 2008 while she was crumbling. She is likely still alive, while Michael Jackson and Prince are not, because of that.
2. Guardianships can be temporary and Britney’s seems to be a perfect example of temporary intervention being all that is required. She should have the right to make stupid decisions on her own.
3. I doubt that I am the only one who read the NYT article who thought that Britney was nothing more than a trained seal performing at the behest of her inner circle for the reward of seeing her sons.
- Tuesday, 03 May 2016 21:47
Frank Zappa was an eccentric musician who died in 1993. He was survived by his wife and four children – Ahmet, Diva, Dweezil, and Moon. (ed note: he was early in on odd names for celebrity children). For the past decade, Dweezil has played his father’s music on a concert tour titled “Zappa Plays Zappa.” After Zappa’s widow (and Dweezil’s mother) died, Ahmet and Diva became trustees of the family trust and have told Dweezil that he no longer has permission to use the title “Zappa Plays Zappa
” without paying $150K each time he performed a song owned by the trust. The concert tour will be titled “Dweezil Zappa Plays Frank Zappa” this summer.
1. The selection of a trustee is vitally important. A corporate trustee would likely be more onerous than the Zappa siblings and extract as much money as possible from Dweezil for performing his father’s music.
2. There is no word on how much his mother made Dweezil pay the trust for the use of the music. Odds are that it was minimal.
3. Dweezil is correct that the new tour name “does not exactly roll off the tongue.”
4. Abel and Cain were unavailable to comment on the sibling rivalry.
5. My first rock concert was Frank Zappa at the Armory Fieldhouse in 1978. How my musical tastes have changed.
- Wednesday, 27 April 2016 20:55
Three brief points:
1. A bank trustee is perfect for this role when no family members have experience in managing such a large amount of assets.
2. I hope the trustee does not quickly resume Prince’s habit of sending take down notices to Youtube for all of his videos posted in recent days. His Super Bowl performance is worth 12 minutes of your time.
3. Did anyone truly believe that Michael Jackson, who left a will, would provide for his death in a better manner than Prince?
- Sunday, 24 April 2016 20:34
Reports are surfacing that Prince did not leave a will. Of course, it is ludicrous to expect someone to present his will one business day after his death. Still, his longtime attorney and friend said that he did not prepare a will for his Purple Majesty because Prince thought he would live to be 1,999. It is unlikely another attorney prepared a will for Prince. He is survived by a sister and three half-siblings.
Three quick points:
1. Live to be 1,999? At some point the attorney/friend has to say, “Dude, the average American lives to be 78. Add fifteen years for taking care of yourself. Tell me who should inherit your sizable estate and let’s write it down.”
2. Under Ohio law, his estate would pass equally to his sister and half sister (plus any children of his dead half-siblings).
3. If the attorney for Harper Lee were appointed as Executor, we would see various outtakes released as newly discovered material and presumably titled “1998.”
- Thursday, 21 April 2016 17:11
In light of Prince’s untimely death, the below chart is fascinating. Most common age of death for pop stars is 56. Mercifully, the trend line is up. Full story here.
- Tuesday, 19 April 2016 13:39
Briefly updating three stories previously mentioned.
1. Paul Walker’s teenaged daughter settled a wrongful death lawsuit for $10 million against the driver of the Porsche in which he was riding at the time of his death in 2013. The settlement actually occurred nearly 18 months ago, but was only recently reported. Her lawsuit against Porsche for manufacturing an allegedly defective vehicle is still ongoing.
2. Sumner Redstone settled the lawsuit filed by his former girlfriend, Manuela Herzner, questioning his capacity to remove her as his health care surrogate and presumably his capacity to revise his will to omit her. She was allegedly slated to receive $50 million plus an expensive house. The settlement is reportedly for less than $70 million.
3. Last, the Louisiana Supreme Court has ruled that the court records regarding Tom Benson’s competency hearings should remain sealed and unavailable to the public. After the Harper Lee probate judge sealed her estate proceedings, it seems that Southern courts have a proclivity for privacy while their predecessors acted in hooded robes for their secrecy.