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Give It Up or Turnit Loose

James Brown, the Godfather of Soul, died in 2006. His estate is still unsettled due to myriad lawsuits. He had intended to leave $2 million for scholarships for his grandchildren, memorabilia to his children, and the rest to a charity for scholarships for children from SC and Georgia.

Lawsuits have involved whether a woman should have been trustee, whether people should have been removed as trustee, the paternity of a son, and the validity of Brown’s marriage (his wife reportedly was married at the time of their marriage) plus the run of the mill will contest suits. The most recent suit involves whether his wife could sell the rights to his songs.

Two points:

1. There are no good lessons here. If heirs want to fight, they will find reasons to fight and no planning can prevent that.

2. I always preferred the music of Brown’s contemporaries, Otis Redding and Sam Cooke, both who died tragically young. One benefit of dying young is that there is no large estate to fight over nor large family to fight.

 

Photo Credit:  Michael Holahan/Augusta Chronicle, via Associated Press and linked NYT article
License:  Fair Use/Education

Faking Amnesia Does Not Pay

Tommy Thompson is a treasure hunter known for locating the wreck of the SS Central America.  The ship, laden with 3 tons of gold, sank in 1857 off the coast of South Carolina killing 425 passengers.  Thompson, with the backing of 160 investors, located the wreck in 1988 and was able to bring some items to the surface.  The value of what remained underwater was reported to be $400 million making it the most valuable ship wreck discovery in history.

By the early 2000s, some of his investors sued him claiming that Thompson had sold the gold and kept the profits to himself.  An arrest warrant was issued in 2012 but he was able to stay on the lam until early 2015.  As part of a plea deal, Thompson said that some gold was in a trust account in Belize.  He now claims to have no knowledge of the location of the gold.  A federal judge has ordered him held in prison for the past 16 months for contempt of court.  The judge has asked him to sign a power of attorney so attorneys for the investors can examine trust documents.  Thompson has refused to do so.

One wonky point, one consequence, and one observation:

1.   The trust is what is known as an asset protection trust.  It is used by people to shield their assets from creditors.  There is likely a provision in the trust that prohibits the trustee from revealing anything about the trust without the consent of the grantor.  Thompson has refused to give that consent so the terms remain private.  And he remains in jail.

2.  Asset protection trusts are great in concept until a court forces the grantor to reveal the contents of the trust or to bring the assets back to the U.S.  They then became no more valuable than the paper they are written on.

3.  Salvage operations and justice both move equally slowly.

 

Photo Credit:  AP File Photo/Delaware County Sheriff’s Office

License:  Fair Use:  Education

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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.