Sunday, July 27, 2014

Back in Town

Just returned from 2 weeks in Spain and Morocco.  Blog post to follow.  In the meantime, here are some vacation pics of my children.












 

Sunday, July 13, 2014

Up in Smoke

When jet setting heiress, Doris Duke, died in 1993 she left a small trust for her last living relative, Walker Inman, Jr.  Inman lived with her after being orphaned at the age of 13.  He had previously inherited an inflation adjusted equivalent of $350 million from other relatives when he turned 21.

Inman died of a methadone overdose in 2010.  He left his remaining fortune in trust for his now 16 year old twins.  The twins and their mother are suing the trustees of the trusts trying to determine how much money is left while complaining that the trustees they were too generous in giving money to Inman who spent $90K per month.  Meanwhile the mother is asking the trustees to buy a $29 million ranch and a $4.2 house, and reimburse her $17K for 4 days in Vegas. His fifth wife, and proverbial former topless dancer, has asked for $1.9 million.  The trustee has vetoed those requests.   The twins will receive their inheritance at 21.

Several points:

1.  21 is way too young to receive a principal distribution of any significance.  I stagger distributions in my trusts with increasing amounts over time with the first distribution at 25 and the final distribution at the age of 40.

2.  An anti-alcoholism, drugs, and gambling clause is also recommended to prevent heirs from harming themselves with their inheritance.

3.  Supposedly nothing is sadder than the tears of a clown, but I think a middle aged man dying of a drug overdose is close.   Sad meaning pitiful.

Sunday, July 6, 2014

Really Dead but Virtually Alive


Ever wonder what happens to your social media accounts after death?  Most likely not, but the below chart nicely illustrates how the various providers treat them.

Three quick points:

1.  Your will should have a clause authorizing the social media provider to follow the directions of your executor.

2.  Write down your passwords and let your executor know where they are located.

3.  Even after the account is deactivated, the NSA likely has a copy of it (and your emails and phone calls) in its Utah data center.

Thursday, July 3, 2014

Tarnished Sterling


The trial deciding whether Shelly Sterling can sell the Los Angeles Clippers as trustee of her husband's trust will start on Monday, July 7.  Her husband, Donald Sterling, was banned from the NBA for life and fined $2.5 million after his "girlfriend" recorded him making racist statements.  After he was declared mentally incapacitated by 2 physicians, he was removed as trustee of his trust which enabled his wife to sell the team to Steve Ballmer for $2 billion.  The purchase price is the second highest for a sports franchise and is 2x the second highest American purchase.   Sterling only  paid $13.5 million in 1981.  The trial will focus on the trust terms.

Several points:

1.  The trusts I draft for my clients have similar provisions for removing a mentally incapacitated trustee.

2.  That Sterling is not accepting of the incredible $2 billion offer for a franchise known as the most inept in all of sports during his ownership tenure is evidence that he might be mentally incapacitated.

3.  His argument will be that he is not incompetent but simply racist and making a bad business decision.  He might wish to re-think that.

Sunday, June 29, 2014

Out of Sight, Out of Mind

The NYT blogged about a woman who left her estate to her daughters while disinheriting the children of her son who predeceased her.  Although she was suffering from dementia, two weeks before her death she re-affirmed a prior will which included the grandchildren from her dead son.  She then changed her mind five days later and excluded the grandchildren.  The grandchildren challenged the will and eventually settled for a small amount to be shared among them.   The protagonist granddaughter decried that she wished her grandmother had conversed with her about the will and that she wished her grandmother had left her wishes in a letter.

Several points:

1.   Wills may be challenged on the grounds of undue influence ("Mom, leave it to us, our dead brother's kids are never around") and lack of mental capacity (i.e. dementia).  Both grounds seem to be present in this case.  It seems that they could have fought longer for their father's share.

2.  When one's parent dies and one wishes to inherit the deceased parent's share of a grandmother's estate, constant contact, e-mails, visits, thinking of you cards, and holiday gatherings are time well spent.

3.  Contrary to the granddaughter's naive wishes, clients never tell someone they are are being disinherited much less express those wishes in a writing.  The will serves as that written document.  The woman, Kate, was smart to not use her last name lest she and her naivete be subject to ridicule by those who met her.

Thursday, June 26, 2014

Fortress Around His Heart

Sting was in the news this week due to his announcement that he does not intend to leave his $300 million fortune to his six children at his death.  He believes that a trust fund would be an albatross around their necks.

Several points:

1.   I think leaving money to charities instead of the six people in the world he loves the most is over-reactive.  A trust can be structured to provide incentives to his children to work and be productive while providing  safety net for them.

2.  Most people would be willing to suffer through that albatross.

3.  $300 million is impressive for a man who has produced only unmemorable, monotone dirges in the 30 years since breaking up the Police.

Tuesday, June 24, 2014

The "Fun" in Funeral

Taking another break from newsworthy estate issues, the NYT reported about the beginning of a funeral trend primarily in New Orleans where the deceased is not in a coffin but is posed as if alive.  A 53 year old woman was recently posed at a table holding her cigarette with a can of Busch beer in front of her. In April, a socialite was posed sitting on a bench on a downtown theater greeting guests.

Several points:

1.  Although the Big Easy boasts of putting the fun in funeral, spectacles are not always fun but can be morbid.

2.  I suspect that the beer and cigarette depicted might have contributed to the woman's death at 53.

3. I know they were going for authenticity, but the woman was posed with a Busch beer instead of a nice microbrew as her final beer?