Blog | Jay Brinker – Cincinnati Attorney

This Is Not Springfield, It Is L.A.

Sunday, 04 October 2015 20:55

splash-samsimoncharity-600x375 Sam 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

Sunday, 04 October 2015 20:21

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

Tuesday, 29 September 2015 21:15

bill davidson B99286604Z.1_20150708215242_000_GUFHV1AF.1-0 As 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

Monday, 21 September 2015 20:49

A 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

Thursday, 17 September 2015 20:14

meadow 2C581E1600000578-0-image-m-12_1442327019151 Meadow 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

Tuesday, 15 September 2015 21:08

immortality-photos-slide-Q7WJ-superJumbo In 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

Monday, 07 September 2015 20:34

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

Friday, 04 September 2015 10:41

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

Limited Inheritance

Wednesday, 02 September 2015 19:45

vs_logo_s A 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

Monday, 31 August 2015 20:35

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.

Clear and Present Estate Taxation

Wednesday, 26 August 2015 20:00

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).

Procrastination Is Not Discrimination

Monday, 24 August 2015 21:42

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.

Google and Death

Tuesday, 18 August 2015 20:04

Google recently updated its terms of service to make it easier for the relatives of a deceased owner of a Google account to deal with the account. By checking a box, an individual can request that Google close an account, notify Google that a user is deceased, request the payment of funds from a deceased user’s account, and obtain data from a deceased user’s account. The request page is here.

Three brief points:

1. This is a a rare example of Google acting uncharacteristically altruistic instead of operating solely in its own self interest.

2. The wills I draft always have provisions permitting an executor to access the digital accounts and digital assets of a deceased individual.

3. The request to obtain data from a deceased user’s account does not apply to the NSA – they already have it.

Love Thyself and Love Thy Shrink

Thursday, 13 August 2015 21:11

Amy Blumenthal moved to NYC and started seeing a psychiatrist, Dr. Susan Turner, to fulfill her prescriptions. Six months later Turner allegedly dropped Blumenthal as a patient, started dating her, and soon moved into her apartment. Blumenthal eventually re-wrote her will to leave her $7 million estate to Turner. Blumenthal died 3 1/2 years after starting the romantic relationship with Turner. Blumenthal’s brother, a hedge fund manager and owner of a swimwear line, is challenging the will on the grounds that Turner unduly influenced his sister in the preparation of her will.

Several quick points:

1. Although it is unethical for a psychiatrist to date a patient whom the psychiatrist is treating, it is not unethical for the psychiatrist to be named as a beneficiary of the patient’s will although an argument can be made that the psychiatrist unduly influenced the patient.

2. When a woman leaves her estate to her girlfriend of 3 1/2 years while ignoring her brother the hedge fund manager who is presumably well off, it is difficult to prove undue influence.

3. I thought that hedge fund managers only cared about billions, not single digit millions. I also did not think that they had sideline swimwear businesses.

Daddy Knows Best?

Wednesday, 29 July 2015 20:53

Maurice Laboz was a NYC real estate investor worth $37 million when he died earlier this year. He left $10 million in trust for each of his daughters and provided that they will receive their inheritance when they reach 35. However, they may receive funds earlier if they abide by his wishes of signing a pre-nuptial agreement prior to marriage ($500K) and graduating from an accredited college and describing the use of trust funds distributed early ($750K). They will also receive a distribution of 3x their annual salary each April 15 and distributions for staying at home with children born in wedlock (3% of the trust value annually). He also disinherited his wife whom he was in the process of divorcing.

Several quick points:

1. Funded trusts are a great vehicle for disinheriting a spouse in the midst of a divorce proceeding. Otherwise, the estranged spouse is entitled to a percentage of the estate at death (1/3 in Ohio).

2. Incentive trusts such as Mr. Laboz’s are good for imposing one’s wishes and values from the grave upon one’s descendants.

3. Personally, I favor a trust clause that distributes 10% of my children’s inheritance to charity for each tattoo that they have, visible or not.

She Didn’t Know (Updated)

Tuesday, 28 July 2015 09:19

Now that Bobbi Kristina Brown has died after six months in a coma, let’s revisit what will happen to her estate and her mother’s estate, while also covering what she should have done differently. To recap, Bobbi Kristina was a month shy of 19 years old when Whitney died. Whitney’s 1993 will created a trust solely for the benefit of Bobbi Kristina. The trust distributed 10% of Whitney’s estate to Bobbi Kristina when she was 21 with the remainder to be distributed at the ages of 25 and 30. Bobbi Kristina received approximately $2 million on her 21st birthday. After Bobbi Kristina was found unconscious, her father (Bobby Brown) and grandmother (Cissy Houston) made her medical decisions for her somewhat contentiously.

What should have happened?

1. Whitney should have provided that her estate be distributed to her daughter at an age later than 21. I never draft trusts with such a young age for principal distribution.

2. When Bobbi Kristina received her first distribution from her trust, she should have created a will of her own which would have enabled her to leave her $2 million to her “husband”/adopted “brother”, Nick Gordon.

3. Upon turning 18, Bobbi Kristina should have executed a health care power of attorney, living will, HIPAA release, and financial power of attorney designating a specific family member to handle her affairs if she were disabled. I always recommend this for my clients whose children are heading off to college.

4. None of this was done. Of course, I doubt that basic estate planning was a priority for a family prone to alcohol and drug use while bathing.

Look In the Mirror, Sweetheart

Saturday, 18 July 2015 14:33

A 22 year old rising college senior recently called into a radio advice show because she had exhausted the $90K college fund her grandparents had left her. She does not have funds to pay for her senior year after using some of the funds for a trip to Europe, college breaks, and clothes. Some of her comments included the following:

1. “Maybe [my parents] should have taught me to budget or something. They never sat me down and had a real serious talk about it.”

2. “[My parents] said there was nothing they could do for me. They’re not being honest with me saying they don’t have [money] because my dad has worked for like a million years and they have a retirement account.”

3. “Then my parents suggested I go take out a loan at a credit union and I’m, like, how am I supposed to do that?” coupled with “I have to go inside a bank to get a loan?”

4. “I know they’re trying to teach me a lesson and blah blah blah and character building but, like, I hope they realize [working part-time] could have such a negative effect on my grades and as a person.”

Several quick estate planning points:

1. The grandparents would have better served their delicate (and irresponsible) granddaughter by funding a 529 plan which would have allowed them to ensure that distributions were only made for tuition and other direct college expenses.

2. If she received the funds as an inheritance, the grandparents should have left them in trust for her and provided that the funds could only be disbursed for education related expenses.

3. This young woman is emblematic of many contemporary college students who are supporters of Obamacare, Big Government, and campus speech and sex codes because they are incapable of providing for themselves and need an authority figure to do that for them.

Pistons, Lightning, Shock, and Fury

Sunday, 12 July 2015 21:19

William Davidson was the owner of the Detroit Pistons, Tampa Bay Lightning, and Detroit Shock (WNBA). When he died in 2009, he was listed as the 62nd richest man in the U.S. His estate recently settled litigation with the IRS over the amount of estate taxes owed. The IRS claimed that the estate owed an additional $2.8 billion (yes, with a B) in estate taxes. The dispute involved the value of closely held stock transferred to various trusts. The estate settled for $388 million.

Points, if I must:

1. I would call this a victory for the estate given that the IRS was seeking 7X more than the settlement amount.

2. Of course, it is never a victory for the family when they had already presumably paid more than $1 billion in estate taxes and were fighting over the incremental taxes.

3. All of this begs the question about how much estate tax is enough from one individual. If Democratic candidate nee Socialist Bernie Sanders were president, Davidson’s tax bill would have been $1 billion more.

4. Last, if one owns a professional sports team, or three, good estate planning advice is essential.

The Uncomplicated Line

Wednesday, 08 July 2015 10:14

Paul Daugherty of the Cincinnati Enquirer allowed me to guest write his The Morning Line blog today. I wrote about his book “An Uncomplicated Life” in addition to the usual sports topics. I hope you enjoy it.

Back In Town

Monday, 06 July 2015 20:48

Just returned from two weeks in Ireland and Iceland. Post to follow soon. Meanwhile, here is a picture of Blair and Jack from Kinsale, Ireland.

BlogRead the Latest News

This Is Not Springfield, It Is L.A.

Dad’s Weekend

Pistons, Lightning, Shock, and Litigation

She Doesn’t Get It – Redux

D List Actress, A List Will Contest

Staying A Head

Cuckoo Estate Planning

TML – Football Is Back

Limited Inheritance

DIY = Disaster Is Yours

Clear and Present Estate Taxation

Procrastination Is Not Discrimination

Google and Death

Love Thyself and Love Thy Shrink

She Didn’t Know (Updated)

Look In the Mirror, Sweetheart

Pistons, Lightning, Shock, and Fury

The Uncomplicated Line

Back In Town

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