- Monday, 22 April 2013 13:26
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.
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.
- Thursday, 11 April 2013 13:28
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.
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.
- Friday, 05 April 2013 13:19
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.
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.
- Wednesday, 03 April 2013 13:10
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.
- Wednesday, 27 March 2013 12:46
Merton Simpson – a NY artist , pre-eminent collector of African art, and gallery owner – died 2 weeks ago. His body remains unburied at the funeral home due to a family dispute.
Prior to his death, a guardian was appointed to manage Mr. Simpson’s affairs. His estate is valued “in the millions” but the assets are illiquid. The guardian does not have enough funds to pay for a funeral and the executor of the estate has not been appointed yet and will likely also have insufficient liquid funds in the near term.
The primary lesson is that Mr. Simpson should have included a trust in his planning and transferred his assets to it prior to his death. The trustee could have sold art pieces as necessary without outside supervision. Mr. Simpson would have avoided avoided the guardianship, the delay caused by waiting for the court to officially appoint an executor, and the Sherman Hemsley-esque burial fiasco.
Even without estate taxes, trusts are still necessary.