Married Without Children

In lieu of much newsworthy, I will resort to the evergreen story of the seemingly penniless senior citizen who left a large bequest to a charity in his will. Ken Millen was born in Aberdeen, WA, attended Grays Harbor College there, worked as shoe salesman until the store went out of business in the '80s, and always lived in the house in which he was born. He inherited some funds 20 years ago from a brother who was an attorney in the South. When Millen died last year, he left some crappy personal property, including his 1979 car, to his neighbors who treated him like a family member. He left the remaining $1 million to his alma mater. The neighbors ended up hauling most of the personal belongings to the dump because they were worthless.

A few non-legal points:

1. As heart warming as these stories are portrayed, they are actually somewhat bothersome in that an individual who was treated decently and warmly by neighbors for years eschews leaving them any funds in lieu of giving it to an institution he attended 65 years ago but likely did not have much present contact with.

2. Estate planning attorneys need to do a better job with clients without living relatives to guide them to leaving some meaningful assets to important individuals in their lives rather than faceless institutions. 

3. Mercifully Grays Harbor College does not have a football team so the bequest cannot be wasted on an unnecessary scoreboard.

4. To quote Aberdeen's most famous resident: "I found it hard, it's hard to find, Oh well, whatever, never mind."

Big Tips and Big Bequests

Late NYC art dealer, Robert Ellsworth, was in the news recently because he left $50,000 in his will to two waitresses at his favorite restaurant. He also left $10 million, a house in Connecticut,  and $5,000/month to his boyfriend of 50 years who was 17 when he moved in with Ellsworth  The boyfriend is challenging the will because of bequests made in trust to various charities, including Harvard, which would result in the estate planning attorney earning fees for serving as trustee of the trusts.  The boyfriend alleges that Ellsworth was suffering from dementia when he revised his will to include the charities.

Several points:

1.  Presumably a prior will made by Ellsworth was more favorable to the boyfriend because it would be reinstated if the most recent will is declared invalid.

2.  $10 million and $5K/month seems generous, but is barely 5% of Ellsworth's $200 million estate.

3.  Regarding the attorney serving as trustee of the charitable trusts, I generally decline to serve as executor or trustee for my clients because of perceived conflicts of interest.

4.  If Cher could live with Sonny when she was 16, I guess it was then socially acceptable for the 17 year old boyfriend to move in with the then 37 year old Ellsworth.  Now, Ellsworth would be arrested for being involved with a minor, unless he was Doug Hutchison and she was Courtney Stodden.

5.  With its $32 billion endowment, can we all agree that Harvard does not need a nickel more and should use its endowment to lower its tuition?

The Multi-Millionaire Next Door

Ronald Read was a gas station attendant in Vermont who retired after 25 years and then worked as a janitor for J.C. Penney for 17 more years. When he died last year at the age of 92, he left most of his $8 million estate to the local library and hospital.  His step son, whose mother died in 1970 after a brief 10 year marriage to Mr. Read, was unaware of his wealth.   He was renowned for his frugality, which included not paying for parking, wearing clothes held together by safety pins, and gathering free fire wood for his stove.  No one suspected he had any wealth, much less $8 million.

Several quick points:

1.  Assets worth more than $5.43 million are subject to federal estate tax, but bequests to charity are not taxable.  Mr. Read's estate will not be subject to federal estate tax.

2.  Mr. Read's estate will not be subject to Vermont estate tax either because Vermont exempts $2.75 million from estate taxation.

3.  Kudos to his step-son who continued to visit his step-father for 45 years after his mom died after only 10 years of marriage to Mr. Read.

4.  Perhaps we could all accumulate a significant net worth like Mr. Read if we eschewed cell phone and data plans, cable TV packages, and daily Starbucks runs.

If You Have to Ask, . . . .

An individual who is  a beneficiary of his uncle's estate asked the Ethicist at the NYT if he should follow his uncle's instructions to donate several thousand dollars to various charities.  The instructions were made in a letter accompanying the will.  The beneficiary perceived the groups to be "extremely right wing" and was offended by some of them.   The Ethicist instructed the beneficiary to make the donations or not take any money.

Several points:

1. Leaving money to someone with the expectation that he will share it with someone else or a charity is not legally binding nor a good idea (see the comment about not legally binding). 

2.  Charitable bequests should be made in the will so they are carried out (and so charitable deductions are effective).

3.  Expecting anyone from California to donate money to a conservative cause is tilting at windmills.   

All Cats (and Shelters) Look Gray in the Dark

An animal shelter in Collinsville, Oklahoma which always struggled financially received a $188K check from the estate of an unindentified deceased animal lover.  Two weeks later, it received a request from the law firm administering the decedent's estate to return the check because the bequest was intended for a shelter with the same name in Collinsville, Illinois.  The shelter has not yet returned the check, although it has said it will. 

Several points:  

1.  In making charitable bequests, I always list the address of the charity to prevent this type of confusion.

2.  Because of its error, the law firm has stated it will donate $12K to the Oklahoma shelter, which is 6x more than the shelter usually has in the bank.

3.  Apparently the Oklahoma shelter spent some of the $188K, perhaps $12K, or else it would have returned the funds last month.