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Boxing for Dollars

duboseSamuel Dubose was the Cincinnatian who was shot and killed by a University of Cincinnati police officer after being stopped off campus for not having a front license plate (a “chicken shit” stop in the words of the county prosecutor).  He is survived by his mother, father, and 11 children from various mothers.  

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Maraschino Marijuana

cherry1Arthur Mondella was the high living, third generation owner of a Brooklyn maraschino cherry family business.  When his business was being investigated for illegally dumping cherry juice onto the streets, investigators found a large marijuana grow room.  He then locked himself in his private bathroom and shot himself.

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Money Play

shele-covlinon New Year’s Eve in 2009.  The estranged couple was in the midst of divorce when Shele Covlin was found dead in a bathtub.  An autopsy revealed she had been strangled.  Ms. Covlin reportedly feared for her safety and had an appointment with an attorney to change her will the next day according to court filings.  Since her death, her husband, an unemployed backgammon expert, has been blocked from receiving any of her $1.0 million estate.  She changed the beneficiaries of her $1.6 million insurance policy to her children the month before she died.

There are a litany of estate planning issues, but let’s focus on the major ones:

1.  Changing a will and other documents during a divorce proceeding is always advisable if not prohibited by agreements between the parties or the domestic relations court.

2.  Simply changing a will can allow the other spouse to inherit up to one third of the probate estate if the spouse elects to take the elective share provided by statute.  Transferring the assets to a trust would be a more effective means of disinheriting a divorcing spouse.

3.  If convicted of murder, the husband will lose all benefits to his deceased wife’s estate under NY’s Slayer Statute.

4.  Am I the only one who doubts that Shele Covlin had an appointment on New Year’s Day to change her estate plan? The day after perhaps, but not on New Year’s Day.

 

 

 

 

Grandma Murders, Grandkids Inherit Millions (Pt. 2)

Fontainebleau-Miami-Beach Ben Novack was the son of the builder of Miami’s Fountainebleu Hotel.  Both he and his 86 year old mother were murdered at the behest of his wife of 18 years, a former stripper, within 3 weeks of each other in 2009 to collect his $10 million estate.  His wife was convicted of his murder in 2012 and is now serving life in prison.  

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Khloe and Lamar (Update)

khloe-kardashian-lamar-odom-divorce-relationship-news-update-2014At the risk of turning this blog into TMZ-lite or another gossip site, Khloe Kardashian and Lamar Odom have called off their pending divorce. Lamar has recovered enough from his cocaine and Viagra induced coma that he is now in physical therapy.

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Coma and Lamar

Lamar_KhloeLamar Odom remains in a coma in Las Vegas after being found unconscious in a Nevada brothel after going on a weekend bender with cocaine and herbal viagra. His estranged wife, Khloe Kardashian, is reportedly making his medical decisions for him even though they separated two years ago and signed their divorce papers in July.  Los Angeles divorce courts have a four month backlog of divorce cases.

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The Wind Cries Stolen

hendrix 5618565e0cf0c.imageA Tucson guitar shop is being sued by the estate of Jimi Hendrix over the ownership of a guitar previously owned by Hendrix.  The shop owner claims to have bought the guitar, valued at between $750K and $1 million, from an individual who obtained it from Sheldon Reynolds, the former husband of Hendrix’s sister.  The estate claims that the shop does not have title to the guitar because the guitar was stolen by Reynolds. The estate also claims that the guitar is priceless to the Hendrix family.

Three points:

1.  Under Ohio law, a thief can obtain “voidable title” which means that he owns the property until the legitimate owner claims it.  However, once the thief transfers the property to a purchaser who is unaware that the property is stolen, the purchaser becomes the lawful owner.

2.  If this were an Ohio case, the guitar shop owner would have valid title to the guitar no matter how Sheldon Reynolds obtained it before selling it – whether through gift from his wife (doubtful) or from his 14 year old step-son giving it to him by mistake (less doubtful) or simply taking it  – because the shop obtained it from a third party who was unaware it was stolen.

3.  In spite of the family’s claim that the guitar is priceless to them, I suspect it is really worth $750K to $1 million to them.

 

 

The Final Cut (Robin Williams Pt. 3)

robin-williams-435The widow of Robin Williams and his children from his prior marriages settled their dispute over his estate this week.  His third wife was seeking some of his personal belongings, which he left to his children in his will, and funds to continue to reside in their home for the rest of her life.  Williams had left her the home in trust, but apparently did not set aside a specific sum to provide for the upkeep of the house for her lifetime.  The undisclosed settlement provides that she will have sufficient funds to live in the house the rest of her life, plus she will be able to keep their wedding gifts, a bike they purchased on their honeymoon, a watch, and the tuxedo he wore to their wedding.  They also disputed the ownership of various photographs.

Three brief points:

1.  This dispute was really about the funds to keep her in their Tiburon house.  The rest of the items are inconsequential.

2.  I am glad his children were able to allow his widow to have one watch and one bike from his watch and 50 bike collection.

3.  In the era of digital photography, does anyone really fight over the ownership of pictures when they are readily reproduced?

 

 

This Is Not Springfield, It Is L.A.

splash-samsimoncharity-600x375Sam Simon was renowned as the co-creator of “The Simpsons.”  When he died earlier this year, he left an estate worth at least $100 million, most of which he left to charity.  He left the care of his rescue dog, a Cane Corso (think a pit bull on steroids, dating from Roman times) to the dog’s trainer.  Alas, he did not leave any funds to the trainer for the care of the dog which requires twice a week acupuncture at $3,600 per month, gluten free regionally sourced food for $185 month, and $150 grooming every three weeks.  The trainer also requested his $7,500 monthly fee to work with the dog to keep it from “changing your life in an instant (i.e. mauling)”  even though the trainer now owned the dog.  The trainer is upset that the trustee will not provide him the funds he has requested to care for the dog.

Several points:

1.   Trusts to provide for the care of pets after the death of an owner are permissible under Ohio law.

2.  If Mr. Simon’s trust did not specifically provide for the care of the dog after his death, the Trustee is not permitted to distribute funds to the new owner of the dog.

3.  When leaving someone one’s pet, one should also leave a sum of money to care for the animal. I always address this issue with my clients, lest they impose a financial burden on their friends.

4.  Mr. Simon could have made a huge difference in many human lives with the $140K he was spending annually on a dog prone to attacking anyone who walked onto his property, although attacking Howard Stern is understandable.

5.  Gluten free, regionally sourced food for dogs?  L.A. deserves our scorn and mockery.

 

 

 

 

Dad’s Weekend

20151003_022631694_iOS (2)Dad’s Weekend.

Just returned from Dad’s Weekend for Blair’s sorority at Indiana University. It is always great to spend time with her. Post to follow soon.

Pistons, Lightning, Shock, and Litigation

bill davidson B99286604Z.1_20150708215242_000_GUFHV1AF.1-0As I previously wrote, William Davidson was the owner of the Detroit Pistons, Detroit Shock, and the Tampa Bay Lightning.  He was also the 62nd richest man in the U.S. at the time of his death with a reported net worth of $4.5 billion in 2008 (and perhaps $3 billion at the time of his death in early 2009).  His estate recently settled a dispute with the IRS over the amount of transfer taxes owed for $388 million after the IRS claimed a $2.7 billion deficiency after his estate had previously paid $245 million in transfer taxes.  His estate has now sued Deloitte and Touche for $500 million on the grounds that the estate planning advice was bad and that the firm had wanted to land Mr. Davidson as a client for marketing purposes. Allegedly, Deloitte had promised that “he would win if lived and would he would win if he died” with their strategies.

Several points:

1.   I understand the frustration, but I do not see the damages (which are key for a lawsuit).  The effective tax rate for deaths in 2009 was 45% which means that Mr. Davidson’s total tax bill conservatively could have been $1.35 billion.  Instead, with tax planning he paid $583 million in taxes with only $133K in penalties.  I do not see how his estate was harmed by the planning advice.

2.  According to the figures, his estate declined in value by 1/3 in one year.  The financial crisis was hard on everyone.

3.  If he had died in 2010 like George Steinbrenner, his estate would not have owed any estate taxes because there was no estate tax that year  (although there would have been a deficiency for his unpaid gift and generation skipping taxes).

4.  I remain unconvinced that anyone truly “wins when they die.”

 

 

She Doesn’t Get It – Redux

tumblr_nurz73kQrz1unv2fuo1_250A young writer recently wrote a web piece titled “If You Have Savings in Your 20’s, You’re Doing Something Wrong.” The article contained the following gems:

  • People who are saving in their 20s are people who don’t set their sights high. They’ve already dropped out of the game and settled for the minor leagues.
  • Your 20s are not the time to save; they’re the time to gamble. $200 a month isn’t going to make the dent that a $60,000 pay raise will after spending all those nights out networking.
  • We don’t have kids. We’ll be renting for the foreseeable future, and we have no problem eating McDonald’s when we’re skint.

Several quick points:

1.  If this advice was from a 40 year old looking back on life, it would be less laugh
able that it is coming from a 20 something trying to justify her lifestyle.

2.  I am not sure I know anyone who received a $60K annual raise but she seems to think they are plentiful.

3.  The value of the monthly $200 expenditure she mocks is $1 million after 45 years.

4.  If she continues to spend what she makes, she will rent forever, not just the foreseeable future.

5.  The writer and the 2 million plus people who liked her article on Facebook are likely constituents of Bernie Sanders because they are counting on others to provide for their retirement.

 

D List Actress, A List Will Contest

meadow 2C581E1600000578-0-image-m-12_1442327019151Meadow Williams is an actress of whom you have never heard and who appeared in movies you never saw.  She was married to Gerald Kessler, founder of Natural Organics natural supplements company, for four years prior to his death earlier this year.  He was 31 years older than her.  In 2013, he changed his will to leave all of his $800 million estate to her while excluding his 2 children and 5 grandchildren.  His children and grandchildren have contested the will on various grounds, including fraud, undue influence, lack of mental capacity, and the fact that Ms. Williams’ divorce from a prior husband was never finalized even though it was filed in 1994.

Several points:

1.  The fact that Ms. Williams might not have been officially divorced should not be a factor in whether Kessler’s will was valid – he could leave her money whether they were married or not.  The estate tax implications vary, but the bequest remains the same.

2.  Still, 20 years to finalize a divorce?

3.  If Ms. Williams did convince her husband to leave her all of his estate, she might have over-reached.  She could have lived comfortably on any single digit fraction of his estate while still leaving money for his children.

4.  Ironic that that the children of a fortune based on natural supplements allege fraud in a will contest.

 

 

 

 

 

 

Staying A Head

immortality-photos-slide-Q7WJ-superJumboIn a slow week in celebrity estate news, the only newsworthy item is an NYT article about cryonics and a young woman who had her brain preserved upon her death from cancer 2 years ago.  To raise the $80K needed to pay for the freezing of her brain until her brain can be brought back to life in the future, she and her boyfriend posted a plea on Reddit.   A post-death brain scan has shown that the chemo-preservatives needed to protect her brain from ice damage only reached the outer level of her brain.

Several points, mostly dorm room existential:

1.  If you could be brought back to life, but everyone you knew had died, would you still want to be brought back?

2.  If you are the boyfriend and your long dead girlfriend was brought back to life, would you leave your current spouse and family to be with her?

3.  If 80% of your dead girlfriend’s brain is damaged by the freezing, would she still be the person you would want to be with?

4.  Would Bill Clinton preserve Hillary’s brain?  Or vice versa?  I think we all know this answer.

5.  If the young woman ever wanted Ted Williams’ autograph, or to meet Walt Disney, cryopreservation was her only hope.

 

 

Cuckoo Estate Planning

birdswill (1)A Manhattan millionaire left $100K to a pet trust for her 32 cockatiels.  She requested that the birds continue to live in the aviary in her $4 million East Hampton property; that they be fed Avi-Cakes (which cost $115 for a 20 lb bag), carrots, water, and popcorn; and that the building be cleaned each Monday and Thursday.  She was far less meticulous with the rest of $5.3 million estate which she initially left to her step-son in a 2006 will.  She later tried to revise that will by crossing out his name and writing in the name of her sister who is now claiming the remaining $5.2 million.  

Several points, some of them previously made:

1.  Certainly this woman missed the forest for the trees – she focused on a picayune aspect of her estate while ignoring the proper disposition of the bulk of her estate.

2.  Handwritten changes on a validly executed will are ineffective and will likely lead to her step-son inheriting the $5.2 million (at least under Ohio law)

3.  As mentioned previously, I retain the original documents for my clients to preempt this type of attempted change/spoliation of wills.

4.  This type of myopic focus on pets while ignoring one’s relatives is more commonly seen in cat owners rather than bird owners.   

 

 

TML – Football Is Back

NFL (2)Paul Daugherty of the Cincinnati Enquirer allowed me to write his The Morning Line Blog again today.

 

Limited Inheritance

vs_logo_sA Columbus widow is suing L Brands, the parent company of Victoria’s Secret and Bath and Body Works (and originally known as The Limited, Inc.), claiming that she inherited $1.5 million of stock that L Brands refuses to acknowledge.  Her late husband,a bricklayer, allegedly purchased 50 shares of The Limited Stores in 1976 after receiving a stock tip from a client.  His widow claims his stock certificate for 50 shares is an original certificate and is now worth $1.5 million after 7 stock splits and 40 years of unpaid dividends.  The company has not yet responded in court.

Several practical points:

1. I detest stock certificates – they are easily lost during the client’s life and difficult to transfer after the client’s death. I always advise my clients to own stock in a brokerage account rather than in certificated form.

2.  I also always advise my clients to list all of their financial accounts/assets and place the list with their estate planning documents.  This assists their children with settling their estates by providing them knowledge of which assets they own and must locate.

3.  If the stock market continues on its current trajectory, this battle might be moot because the shares will be worthless.

 

 

 

DIY = Disaster Is Yours

A Minnesota woman signed a will in 2006 naming her grandson and a former employee as equal beneficiaries of her estate.   She tried to revoke the will in 2008 and leave her entire estate to her grandson by writing and initialing several changes on a photocopy of the will.  In 2010, she downloaded a DIY will from a website and hand wrote her intent to leave her entire estate to her grandson, but she did not have it properly witnessed.  She died in 2013 and all 3 wills were presented for probate.  The local probate court held that the 2006 will was still in effect because the 2008 notes on a photocopy did not validly revoke the prior will and that the 2010 downloaded form was not validly executed.

Several quick points:

1.  In Ohio, a will can be revoked with a statement of revocation or physical destruction (i.e. shredding or tearing) of the prior will.

2.  I generally retain the original wills of my clients to prevent them from trying to alter their wills by writing on them.

3.  I will once again quote the mechanic from the ’70’s Fram oil filter commercial (because I am from Greenville, Ohio and we had  a Fram oil filter plant in my long ago youth):  “You can pay me now or pay me later.”  I would have billed her $600 to implement her wishes. Instead, her estate spent thousands and her wishes were not followed because she did not follow the simple formalities for signing a will.  The now long ago former employee is forever grateful for her short sighted thriftiness.

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Clear and Present Estate Taxation

When Tom Clancy died two years ago, he distributed his real estate to his 2nd wife, then left the remainder of his $83 million estate in equal thirds as follows:

1.  In trust for his wife,

2.  In trust for his wife and adult children from his first marriage, and

3.  In trust for his adult children from his first marriage.

The  primary asset was his 12% interest in the Baltimore Orioles which was valued at $65 million.  The last codicil signed by Clancy directed that his wife should receive her inheritance “estate tax free.”  His wife and adult children then proceeded to fight over whether the trust for her and them (Trust No. 2) should pay any estate taxes.  A Maryland court recently decided that the trust for the children (Trust No. 3) should pay the entire estate tax bill.

Several points:

1.  Poor drafting leads to expensive disputes.  I have never used the vague term “estate tax free” in any document I have drafted.

2.  If a trust for a surviving spouse is carefully drafted, it can postpone the taxation of its assets until the death of the surviving spouse which is what seems to have occurred here at least with respect to the trust for the spouse only (Trust No. 1).

3.  Shed no tears for anyone in this dispute.  Clancy’s adult children will presumably also inherit the substantial assets his first wife received upon their divorce while his 2nd wife is reportedly an heiress to a Pepsi bottling fortune.  Even the IRS receives nearly $12 million with significantly more millions coming when the 2nd wife dies.

4.  The second wife aka Evil Step-Mom likely cannot die soon enough for his adult children.

(Thanks to Chip Workman for bringing this to my attention).

 

clancy BN-JZ172_CLANCY_J_20150824135616

 

Procrastination Is Not Discrimination

An older woman adopted her younger girlfriend/partner in the 1970’s so the girlfriend could inherit the trust fund created by the older woman’s father.  When the older woman died in 1997, the girlfriend inherited a substantial sum from the trust.  The younger woman died in 2009 without a will.   Her brother staked a claim to her $25 million estate as her closest living relative.  However, NY law (and Ohio law) provides that once someone is adopted, they lose all relationships with their prior family, including the ability to inherit from them, and the ability to leave them assets without a will.  The woman’s estate will escheat to the State of NY because she has no relatives.

Several points:

1.  Lawyers in this case are arguing that the older woman adopted her girlfriend because same sex couples did not have the same rights as traditional couples in the 1970s.  However, that argument is a red herring because the funds were in a trust which could only be left to a descendant which caused the woman to adopt her girlfriend.  Funds not in trust could be left to anyone she pleased – girlfriend, charity, or relatives.

2.  I draft trusts to prevent this type of adoption chicanery by including only children who were adopted prior to the age of 18.

3.  In an era of Obergefell and Kaitlyn Jenner’s reality show, it is easy to create a legal smokescreen by arguing discrimination from 40 years ago, when the real culprit is simple neglect by a wealthy person to create a will.  

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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.