Controversy

As mentioned the other day, Prince did not leave a will. A Minnesota court today appointed a corporate trust company as special administrator to manage his affairs and identify his heirs (I can help - his sister, 3 surviving half siblings, and the children of his 2 deceased half-siblings will inherit under law). His estate is rumored to be worth $300 million. 

Three brief points: 

1. A bank trustee is perfect for this role when no family members have experience in managing such a large amount of assets. 

2. I hope the trustee does not quickly resume Prince's habit of sending take down notices to Youtube for all of his videos posted in recent days. His Super Bowl performance is worth 12 minutes of your time. 

3. Did anyone truly believe that Michael Jackson, who left a will, would provide for his death in a better manner than Prince?

Purple Mess?

Reports are surfacing that Prince did not leave a will. Of course, it is ludicrous to expect someone to present his will one business day after his death. Still, his longtime attorney and friend said that he did not prepare a will for his Purple Majesty because Prince thought he would live to be 1,999. It is unlikely another attorney prepared a will for Prince. He is survived by a sister and three half-siblings.

Three quick points:

1. Live to be 1,999? At some point the attorney/friend has to say, "Dude, the average American lives to be 78. Add fifteen years for taking care of yourself. Tell me who should inherit your sizable estate and let's write it down."

2. Under Ohio law, his estate would pass equally to his sister and half sister (plus any children of his dead half-siblings).

3. If the attorney for Harper Lee were appointed as Executor, we would see various outtakes released as newly discovered material and presumably titled "1998."

Mama Don't Let Your Babies Grow Up to Be Musicians.

In light of Prince's untimely death, the below chart is fascinating. Most common age of death for pop stars is 56. Mercifully, the trend line is up.  Full story here.

Paul Walker, Sumner Redstone, and Tom Benson Updates

Briefly updating three stories previously mentioned.

1.  Paul Walker’s teenaged daughter settled a wrongful death lawsuit for $10 million against the driver of the Porsche in which he was riding at the time of his death in 2013.  The settlement actually occurred nearly 18 months ago, but was only recently reported.  Her lawsuit against Porsche for manufacturing an allegedly defective vehicle is still ongoing.  

2.   Sumner Redstone settled the lawsuit filed by his former girlfriend, Manuela Herzner, questioning his capacity to remove her as his health care surrogate and presumably his capacity to revise his will to omit her.  She was allegedly slated to receive $50 million plus an expensive house.  The settlement is reportedly for less than $70 million.   

3.  Last, the Louisiana Supreme Court has ruled that the court records regarding Tom Benson’s competency hearings should remain sealed and unavailable to the public.  After the Harper Lee probate judge sealed her estate proceedings, it seems that Southern courts have a proclivity for privacy while their predecessors acted in hooded robes for their secrecy.  

  

Hey, New Jersey, Your Tax Base Is Too Narrow

David Tepper is a hedge fund manager whose company is located in New Jersey.  He is also a resident of the Garden State (misnomer alert). He recently announced that he was moving his corporate headquarters and his personal residence to Florida.  The NJ state budget director then stated that this move could affect the amount of tax revenues generated by NJ.  

For the record, NJ has the highest real estate taxes in the country, a state estate tax rate of 16%, only a $675,000 exemption for estate taxes (lowest/worst in the country), and a top income rate of 9%. Florida has no income tax and no estate tax, no Newark or Camden, but plenty of sunshine.  Some NJ legislators wish to revise the state tax code to retain residents like Tepper while others believe his move and others are a "blip" and do not warrant revision of the tax rates.

Three quick points:

1.  If the state is so dependent on the income of one individual, its tax base is too narrow and should be expanded to include more residents.

2.  Those NJ politicians who tell NJ residents to "fuhgeddaboudit" the NJ income and estate tax rates because they do not matter to people are delusional.

3.  Note to Bernie Sanders supporters, you can only tax people so much before they change their behavior to reduce their tax burden.  

Apple, Italians, and Encryption

In a topic that is evergreen, an Italian man adopted a boy from Ethiopia in 2007.  The boy tragically died of cancer last year at the age of 13.  The boy owned an iPhone 6 which both he and his father accessed by finger print ID.  After his son died, the father lost access to the phone because he claims the phone restarted during an access attempt.  The father has since written to Tim Cook begging him to assist with unlocking the phone so he can see the last two months of his son's photos and life.   Apple has been unable to assist him.  In lieu of unlocking the phone, the guy has said he will accept a donation to an orphanage benefiting Ethiopian children. Three repetitive points and one new one:

1. People should share their passwords if they want loved ones to access their electronic devices after death, especially if they are terminally ill.
2. This guy is delusional if he thinks Apple will assist him with unlocking his son's phone to simply view photos and texts (which likely say "hey",) when they would not assist the FBI  in accessing the phone of a mass murderer.
3.  Am I the only one who thinks that this guy is an FBI/NSA plant testing Apple and its devotion to privacy?
4. Donation to an Ethiopian orphanage?  If Italians feel guilty about Mussolini's invasion of Ethiopia, let them fund orphanages rather than shake down US companies.  

Guardians, Drugs, and Embezzlement

A Massachusetts man was appointed guardian of his niece and nephew when their parents died in a car crash in 2009. The man was recently indicted for allegedly stealing approximately $250,000 from their trust fund in the 11 months after he was released from rehab. He pleaded not guilty. 

Three very quick points: 

1. I always recommend that clients designate different individuals to serve as guardian and trustee. 

2.  If different people, the guardian should be able to ascertain if the trustee is stealing from the trust. 

3.  Embezzlers are smart enough to not use stolen funds to buy tangible property, but not smart enough to avoid being caught. Such is the lot of gambling and drug addicts.

Back From Beaver Creek

Post to follow tomorrow.  Meanwhile, here is a pic of Jack in the terrain park.