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If I Read It In the National Enquirer, It Must Be True

Lois Pope, widow of the founder of the National Enquirer, is seeking a restraining order against her son for allegedly stalking her while demanding money.  When the family sold the tabloid in 1988, Mrs. Pope received $200 million and her son received $20 million which she claims he spent by 2008.  She gave him another $16 million which he has allegedly spent.  In a television interview, he complained that she has spent $40+ million on 2 private jets, $2 million on international vacations, and made large gifts to nieces and nephews.

Several points:

1.  A trust would have helped the son manage and preserve his funds.

2.  The trust could have tied distributions to income earned by him which would have forced him to get a job, which apparently he has never held.

3.  If the mom gave her son $16 million, she was obligated to file a gift tax return and pay taxes at a 35% – 45% rate.

4.  If mom wants to buy planes and use them for flying her dogs around the country, she may do that and the son is powerless to complain.

5.  If the son wants more money from his mom, he should refrain from criticizing her on television.  The old axiom about not biting the hand that feeds would seem to apply.

 

Nancy Lanza Will

No snark, today.  Just advice.

Nancy Lanza, mother of the Newtown shooter, left her entire estate to her sons under the terms of a 1994 will which was executed 15 years prior to her divorce.  The preliminary filings show an estate with $60K liquid funds and presumably the house she resided in.

Several points:

1.  At some point she and her husband should have revised their estate plan to include a trust for the care of their son (and to minimize estate taxes).

2.  Post-divorce, she should have revised her estate plan to remove the ex-husband from her documents and to include a trust for her son.

3.  After a divorce from a director/VP at GE Energy Financial Services, and receiving $26K/month alimony, there will be substantially more than $59K in assets.  All the more reason to leave the assets in a trust for her son rather than giving it to him directly assuming he would have survived her.

4.  All parents with children who are unable to manage finances, whether due to young age or a disability, need to have a trust as part of their estate plan.

5.  Anyone who is recently divorced should revise their documents to remove the former spouse and to ensure that the documents reflect their current wishes.

Fame, Hairspray, Infidelity, and Litigation

Ryan O’Neal and the University of Texas are engaged in a lawsuit over a painting of Farrah Fawcett created by Andy Warhol which could be worth $30 million.  Farrah’s will left her entire art collection, including another portrait of her by Warhol, to the University of  Texas.  Mr. O’Neal claims that the painting was given to him by Warhol and that he had taken it to Farrah’s house in 1998 after they broke up because his then girlfriend did not like it in the bedroom.

Several points:

1.   It is generally in poor taste to hang a portrait of an ex in the bedroom while involved with someone else.  Kudos to Mr. O’Neal for removing it.

2.  When taking a piece of art to an ex, one might want to reclaim it in the 11 intervening years instead of waiting until the ex dies.

3.   Apparently the University of Texas is not satisfied with a $7.2 billion endowment and is willing to fight for more.

 

Maid For Trouble

The woman at the center of the U.S.’s most expensive probate battle died this week in Poland.   Barbara Piasecka Johnson was a maid who worked for J. Seward Johnson, Jr.’s family, of Johnson and Johnson renown.  Within 2 years, then 76 year old Mr. Johnson divorced his second wife and married the then 34 year old servant.  When Johnson died 12 years later, he omitted 5 of his 6 children from his will and left nearly all of his of $500 million to his wife.  The children contested the will alleging undue influence and settled for $40 million.

Several points:

1.  Mr. Johnson could have provided for both his widow and his children by creating a QTIP trust (a new trust back in 1983) which would have provided assets remaining after his wife’s death would be distributed to his children.

2.  Contesting a bequest to a maid on grounds of undue influence is easy.    Contesting a bequest to a maid who has been married to the deceased for 12 years on similar grounds is nearly impossible.

3.  Marrying someone younger than one’s children is rarely a good idea.  It might be better to date her and leave her a condo and a Bentley in a will and preserve family relations.

Jerry Buss the Sugar Daddy

Los Angeles Lakers owner, Jerry Buss, died in February at the age of 80.  He was known for epitomizing California cool and was often seen with one or more young women on his arm.  In his will, he left a Honolulu condo and a 2009 Bentley to his 20-something girlfriend, and the rest of his assets to his trust.

For privacy reasons, he could have transferred the condo and car to his trust, and made the bequest from the trust.  This also would have avoided the cost of ancillary probate in Hawaii.

Of course, privacy might have defeated the purpose of letting the world know that at the time of his death he was an 80 year old man with a late 20’s girlfriend.    Estate planning always has trade-offs.

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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.