Monday, February 24, 2020

Lust for Charities

I am back after a two month hiatus fostered by writing for other projects, being slammed at work, re-locating our lives to Phoenix for five weeks, and suffering a dearth of worthwhile news in the celebrity estate planning area. Who knew that the death of a 103 year Hollywood icon would snap the streak?

Media outlets, led by the Daily Mirror from London, are reporting that the recently deceased Kirk Douglas left $50 million of his $61 million fortune to charity. Specifically, he left the money to the Douglas Foundation which he and his 100 year old widow, founded in 1964. All accounts seem flummoxed by where he left the remaining $11 million of his estate. The same reports want to scandalize the fact that he did not leave any money to his famous son, Michael Douglas. No links to his actual will have appeared on line yet.

Several illuminating points:

1. California is a community property state which means that Douglas’ widow, Anne, likely has an estate also worth $61 million.

2. In 2020, an individual may leave $11.6 million free of estate taxes to children or other individuals. It is not a coincidence that $11 million is the amount of funds that the reporters cannot account for. Those funds will likely fund a trust for his wife and two sons.

3. It is extremely rare to leave funds to a child while a spouse is living.

4. Michael Douglas is reportedly worth $300 million which is more than he can spend in his remaining years. It does not make sense to leave any funds to an independently wealthy 75 year old cancer survivor who will pay estate taxes on 40% of the inherited assets at the time of his death.

5. Journalism is not hard, but it certainly is lazy when journalists are afraid to have reliable sources and to ask questions about concepts with which they are unfamiliar.



Photo Credit:  Catherine Zeta Jones Instagram

License:  Fair Use/Education (from linked article)

Saturday, December 21, 2019

Thursday, December 5, 2019

Bye Bye Love

It was recently reported that Ric Ocasek, lead singer of The Cars, left his estranged wife, Paulina Porizkova, out of his will which he executed several weeks before his death.   The former Sports Illustrated swimsuit model left her much older husband a year before she found him dead in his townhouse when bringing him coffee while he was recovering from surgery.   Specifically, Ocasek’s will provided that he did not want Porizkova to inherit even the elective share because she had abandoned him.  Ocasek’s probate estate consists of $5million of royalties and $100K of personal property.

Several points:

1.  Odds are that Ocasek’s estate consists of more than $5 million because he likely had financial assets and real estate titled in a trust prior to his death.

2.  Even if omitted from a will, spouses may elect to receive a portion of the estate which is usually 1/3.

3.  In Ohio, spouses may only elect against the assets passing through probate.  In NY, spouses may elect to take 1/3 of all assets, including those in a trust and others passing outside probate.

4.  You might think I am cynical, but I find it odd that a woman who left her husband uses the Instagram hashtag #loveneverdies.


Photo Credit:Tammie Arroyo/AFF-USA.COM / MEGA
License: Fair Use/Eductation (from linked article)

Wednesday, November 20, 2019

Taken to the Bath

Finally, there is some estate planning news to write about. Gloria Cary was an American woman who was the second wife of the eccentric eighth Earl of Bathurst. When the Earl died in 2011, he left his home and surrounding real estate, valued at $17 million, to his son, and the rest of his estate to his widow.
Typically, his widow and son did not get along even though the couple had been married for more than 30 years. After the Earl’s death, the widow was forced to vacate the family home inherited by the son. She sued for permission to visit the home to view the family’s collection of heirlooms, but she was denied by her step-son.
A few quick observations:
1. At least the son inherited a significant amount upon the death of his father and was not disinherited entirely.
2. Inheriting an English estate is a double edged sword because the maintenance costs can be stratospheric.
3. If the Earl of Bathurst (“Barmy Bathurst”) wanted to ensure his son received some of his fortune, he should have created a trust to benefit his wife with the remainder going to his son. Although a trust might have been a step too far for an eccentric.
4. Of course, if the son wanted to inherit more than the house, he should have acquiesced to his step-mom’s request to occasionally visit and wander around the property.


Photo Credit:  Compendium of pics from Daily Mail
License:  Fair Use/Education (from linked article)