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Fake News

CNN news anchor, Anderson Cooper, is the son of Gloria Vanderbilt who died last month at the age of 95. She in turn was the great-great-granddaughter of Cornelius Vanderbilt. She left all of her estate to Cooper save for her $1.2 million Manhattan co-op which she left to her son, Stan Stokowski.

Gloria Vanderbilt inherited a trust fund worth $35 million in today’s dollars when she turned 21. She also rode the wave of the designer jeans trend in the late 1970’s with her eponymous fashion which was worth $100 million at one time. Initial reports soon after her death speculated that she was worth $200 million. Probate Court filings have since revealed that she only owned her co-op and $1.5 million.

Several points, none too shocking:

1. The data about her net worth would be private if Vanderbilt had used a funded trust for her estate planning.

2. Rare is the fortune that lasts five generations before it is dissipated.

3. Four divorces, dedication to philanthropy, advisors who embezzle, and living into one’s 90s deplete one’s assets.

4. An incredibly gifted plastic surgeon will also deplete assets.

 

Photo Credit:  Unknown

License:  Fair Use/Education

Don’t Do Me Like That

When Tom Petty died of a drug overdose 18 months ago, he was survived by his second wife, Dana York, and his two daughters from his first marriage, Adria and Annakim. Petty created a trust to administer and distribute his assets. He named his widow as the trustee. He also directed that his music rights and royalties be transferred to a company to be managed equally by his widow and daughters.

His wife believes “equally” means a 50/50 split of management while the daughters contend that “equally” means they each get a vote for 2/3 control. The eldest daughter has opposed a 25th anniversary release of Petty’s last good album, Wildflowers, and has flamed various members of his band and the City of Gainesville. His widow has petitioned the LA probate court to appoint a day to day manager of the estate and requested that Adria act respectably.

Several quick points:

1. No matter how much planning a person does, there is no guarantee that his heirs will behave after his death.

2. Second marriages are always ripe for irrational emotional reactions after a death.

3. The estate planning attorney likely wishes he had defined “equally” in the trust.

4. A bank trustee can sometimes diffuse some of a beneficiary’s distrust, but not always. And usually not with someone as ill tempered as Adria.

5. In the streaming music era, the expected windfall from the re-release of Wildflowers is illusory. No one under 50 buys CDs.

Photo Credit:  NY Post? – vidcap

License:  Fair Use/Education (from linked article)

21st Century King Lear

© PatrickMcMullan
Photo – Owen Hoffmann License:  Fair Use/Education (from linked article)

Herbert Neumann is the trustee of trust which owns 60 works of art worth an estimated $50 million. The most valuable piece is “Untitled (Tyranny)” by Jean-Michel Basquiat. The trust was created by Neumann’s brother for the benefit of Neumann’s 3 daughters. Now, one of the daughters, Belinda Neumann-Donnelly, is suing her father in his capacity as trustee to sell all of the artworks. She claims that the art will be impossible to divide equitably and that she needs funds for her family’s “significant housing, litigation, and education expenses.”

The same daughter has another lawsuit, presumably the source of the significant litigation expenses, against her father involving the sale of another Basquiat painting, “Flesh and Spirit,” formerly owned by her mother who died in 2016 that sold for $30.7 million last year. She claims that her father’s threat to contest the sale of the painting depressed the sales price. Oddly, she lives in the same two family building in NY as her father.
Several points:
1. The lawsuit to sell the paintings owned by the trust is likely premature because the trust likely provides that it will distribute its assets upon the death of Neumann.
2. Neumann’s wife, who owned the painting sold for $30.7 million, disinherited him from her will alleging he abused her. I am surprised that he did not elect against the will which would entitle him to 1/3 of his wife’s estate including part of the painting sales proceeds.
3. If Neumann’s wife gave the painting to the daughter before she died, as some articles insinuate, the wife would have been required to file a gift tax return and pay gift tax on nearly $25 million and the daughter would have to pay capital gain tax on almost the entire sales amount (Mrs. Neumann only paid $15K for the painting).
4. The emperor truly has no clothes because Basquiat paintings look like the drawings of a bored high school student on the back of his spiral notebook.

If It Is Not One Thing, It Is Something Else

 

Your chances of death rated by activity. Climbing in the Himalayas is definitely a death wish, as is base jumping (and its cousin, wing suit flying). As a cyclist, I am bummed out to see the somewhat high risk of death for cycling.

Be careful out there. And prepare a will.

 
 
 
 
 
 
 
Source:  besthealthcaredegress.com
License:  Fair Use/Education

Chain of Fools

When Aretha Franklin died last week after a long battle with pancreatic cancer, she allegedly did not leave a will. She is survived by her four sons, one of whom has special needs, who will receive equal shares of her estate. Her niece asked to be appointed as representative of her $80 million estate. Aretha’s copyright attorney told reporters that when there is no will, “there will always end up being a fight.”

Some points of relevant interest:

1. No one wins a long battle with pancreatic cancer. See Jobs, Steve.  Prepare a will.

2. When a woman dies without a will, there should not be much to dispute because there are no illegitimate children to contest heirship.

3. The niece’s fee for serving as personal rep. could be $1.6 million.  One of the sons should have dibs on this role.

4. Surprisingly, Madonna did not ask to be appointed as personal representative.  

Photo Credit:  Jae C. Hong/AP

License:  Fair Use/Education (from linked article)

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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.