Mubarak and Marshall

Thursday, 29 August 2013 01:42
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Anthony Marshall, the 89 year old son of Brooke Astor, was paroled from prison after serving 8 weeks of a 1 -3 year sentence for stealing millions from his socialite mother when she was suffering from Alzheimer’s.   Mr. Marshall’s health problems include Parkinson’s disease and congestive heart failure. His lawyers said recently that he could not walk, stand, clean himself or dress himself and had potentially life-threatening swallowing issues. One of the issues for Mr. Marshall was whether he should have been incarcerated at all given his age.
Estate planning lessons?
I am not really certain.  Stealing from a disabled mom is obviously a bad idea and is subject to punishment. Beyond that?   Incarcerating an 89 year old seems unwise although given the amounts involved it was probably necessary.  The early release seems humane. If Egypt can release former president Mubarak this week, NY can certainly release Mr. Marshall.

Back After Vacation and Technical Problems

Thursday, 29 August 2013 01:37
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Sorry to be away so long.  Two weeks out of the country, followed by a dead hard drive and other tech issues.  Quick vacation pic from Machu Picchu.  New post to follow.

“What is Per Stirpes?”

Thursday, 29 August 2013 01:33
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After I ask clients if they have reviewed drafts of their wills, the question they most often ask me is “what does per stirpes mean?”  It helps that the term is underlined. In short, it means by representation.  If a beneficiary dies before the decedent, that beneficiary’s heirs will divide his or her share.A recent Nebraska case, Estate of Evans, recently interpreted per stirpes in the context of an individual who died without a will and was survived by a nephew from a pre-deceased brother and 2 nieces from another pre-deceased brother. The court held that the 3 individuals would share equally because the division into shares began at the generation with living heirs.

Several points:

1.  In Ohio, the division would be made at the level of the pre-deceased brothers so the nephew would receive half and the nieces would each receive one quarter.

2.  A common fallacy among non-attorneys is that if an individual does not have a will, the assets will escheat to the state.  States have statutes that provide who will inherit assets if there is no will.  Only if there is no one somewhat directly related to the decedent will the assets escheat to the estate.
3.  It is always better to prepare a will to determine who inherits assets rather than leave the distribution to a state statute.

4.  It is rare to be able to use the term escheat twice in the same post.

What in the Name of Tony Oliva?

Thursday, 29 August 2013 01:30
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Carl Pohlad was the owner of the Minnesota Twins.  He died in early 2009.  His estate is currently embroiled in a $121 million dispute with the IRS about the value of his ownership interest and the commensurate estate taxes owed.  The IRS claims that his interest was worth $293 million while his executor claims it was only worth $24 million.  The executor’s value is much lower because it claims that even though Mr. Pohlad owned a majority interest in the team through several entities, he owned only 10% of the voting shares and he died when the stock market was at a 12 year low.
Several points:
1.  Fractional interests of privately held businesses are difficult to value.
2.  Voting control of an entity is worth significantly more the non-voting interests.
3.  Mr. Pohlad died when the financial markets had collapsed and the stock market was being pummeled. However, baseball teams with television contracts and other revenue streams have different business cycles than financial institutions, and should not be valued in the same manner.
4.  As if the Twins habitually losing to the Yankees in the regular season and the playoffs is not ignominious enough, it has be to be more galling to the Pohlads and Twins fans that George Steinbrenner’s estate did not pay any federal estate taxes on his $1.6 billion (yes, with a B) interest in the Yankees because he died in 2010 when there was no federal estate tax.

Blog Reconstruction

Thursday, 29 August 2013 01:26
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I have not posted in this forum for six weeks due to my web site being hacked (thanks Word Press) and then a vacation followed by a dead hard drive and other tech issues.  I have been posting in other venues such as Facebook, Google+, Blogger, and Tumblr.  I will upload those posts here.  Thanks for your patience.