Pirate (and Scoundrel) By Any Other Name

There has been a dearth of newsworthy estate planning news recently, save the step-kids hate step-mom variety, so the Hugh Culverhouse Jr. and Alabama Law School imbroglio sent me down a rabbit hole which I am prone to.  For reference sake, Culverhouse, Jr. pledged $26 million last year to the University of Alabama Law School if they named it in his honor.  The law school returned the entire sum last week after Culverhouse, Jr. encouraged a boycott of the state of Alabama due to its recent anti-abortion legislation.  We are not here to discuss that.

Culverhouse, Jr. is the son of the first owner of the Tampa Bay Buccaneers.  He, his sister, and his mother were estranged from his father at the time of his father’s death in 1994.   Culverhouse, Sr. was notorious for operating his NFL team to maximize the profits while not caring how they fared on the field, which was usually abysmally.  Prior to his death, he told his wife that he was on the verge of bankruptcy and convinced her to sign a post-nuptial agreement which promised her $5 million, a $2 million condo, and her jewelry worth $2 million. After his death, the Bucs were sold for a then record $192 million while Culverhouse’s estate was estimated to be worth $340 million.   His widow filed multiple lawsuits regarding the post-nuptial agreement and the administration of his estate. She eventually settled for $34 million plus the right to control the donation of $10 million to various charities. 

Whew.  So much to unpack, but let’s be brief.

1.  Post-nuptial agreements are not valid in Ohio because Ohio prohibits spouses from contracting with each other.  Ohio’s position is a minority one

2.  Even with the settlement, Mrs. Culverhouse sold herself short settling for a fraction of her husband’s net worth.

3.  Sadly for Bengals fans, Mike Brown adopted the Culverhouse play book of ineptly running a football franchise but maximizing profit. 

Photo Credit:  St. Petersburg Times
License:  Fair Use/Education

Tasered and Confused

A local story has a probate court angle. The City of Cincinnati has agreed to settle a lawsuit brought by an 11 year old shoplifter who was tasered after running from an off duty police officer. The young girl, who had been caught and warned previously for stealing from the same store, had $53 of stolen merchandise on her. She will receive $220,000 from the city and $20,000 from Kroger for the indignity of being tasered.

Several points and one prediction:

1. Because the girl is a minor, the settlement will be subject to probate court supervision until she turns 18.

2. Funds may only be spent with the approval of the probate court and then only for her mental health to overcome the trauma of being tasered.

3. She will have unrestricted access to the funds when she turns 18.

4. Call it more than a hunch that the number of shoplifting incidents at Kroger without repercussions will increase dramatically.

Photo Credit:  Albert Cesare/Cincinnati Enquirer
License:  Fair Use/Education (from linked article)

It’s Not Right But It’s Okay

The estate of Whitney Houston settled its dispute with the IRS over outstanding estate taxes.  The IRS had contended that the valuation of Houston’s back catalog and image and likeness was undervalued by $22 million resulting in $11 million of additional taxes.  The settlement was for $2 million.  Oddly, or perhaps not given the state of journalism in 2017, the focus of most articles was on the value of her image and likeness but the IRS and the estate differed on that valuation by only $200K.

A few small points:

1.  Since the death of Michael Jackson, the IRS has been taxing the image and likeness of dead celebrities with the value based on expected licensing revenues in the future.

2.  Cool fact - Robin Williams said that his likeness cannot be used for 40 years after his death rendering its value worthless.

3.  In the age of streaming music, the longer the estate held out the less valuable the back catalog of albums became.

4.  This was purely a principled, but unemotional, victory for the estate.  Houston’s daughter died nearly 3 years ago and Houston was divorced.  Any estate tax savings will benefit her mother and her brothers.

Photo Credit: Asterio Tecson/Flickr and Wikimedia Commons
License:  Fair Use/Education

Two Words, George. Pre-Nup.

Johnny Depp and Amber Heard settled their divorce case this week for $7 million which Heard has pledged to charity. She had reportedly been seeking spousal support and half of his net worth as a result of their 15 month marriage. During the proceedings, Heard alleged that Depp had abused her. The couple did not have a pre-nuptial agreement.

Several brief points:

1. Depp should have insisted on a pre-nuptial agreement which could have provided that he owed Heard nothing in the event of a divorce.

2. The absence of a pre-nup does not entitle Heard to half of Depp's net worth, but only to what he earned during their 15 month marriage.

3. Anyone making bets on the length of a marriage between a hard partying heterosexual male and a declared bi-sexual woman 20 years younger than him should always take the under.

4. I have long told Janice that her crush on Depp was misplaced. I might finally be vindicated for that opinion.

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.