Black Mamba Trust

This is not about trusting a black mamba. In fact, when we were in Zambia last year, we were advised not to walk to our cabin by ourselves because of the presence of black mambas (and hippos). I was skittish and hyper-aware the entire time.

When Kobe Bryant, aka the Black Mamba, died in January he left a trust for the benefit of his widow, Vanessa, and their daughters. The trust was last amended before the birth of his youngest daughter, Capri, who is not mentioned as a beneficiary. His widow has petitioned the LA Superior Court to add Capri as a beneficiary of the trust.

Several brief points:

1. When drafting a trust, I usually refer to “children” so clients do not have to amend their trusts when they have additional children. The exception is when there is the possibility of illegitimate children who should be excluded.

2. Kobe created his trust in 2003 and had amended it when each daughter was born, except for his youngest. Apparently, it is easy to get distracted and waste time when retired.

3. Kudos to Vanessa. Usually, people are suing to exclude people from a trust rather than include them.

Photo credit:  Vanessa Bryant/Instagram

License:  Fair Use/Education (from linked article)

Hard Work Pays Off

Juice WRLD was a 21 year old rapper who died late last year from an opioid overdose. He allegedly swallowed several Percocet pills to hide them from police who were waiting to search his private plane for drugs and guns upon landing in Chicago.

His mother has asked to be appointed as his estate representative. The estate was recently revealed to be worth $3.2 million. His assets consist of a Miami condo worth $1.5 million, a bank account valued at $1 million, and personal property (mostly watches and jewelry) worth $450K. TMZ reported that he might have additional assets in a trust

Several quick points:

1. Mr. WRLD’s estate will likely exceed what is initially reported because the listed assets do not include his music royalties.

2. His estate will increase in size because the single he recorded with Eminem and which was released posthumously (for him) hit Number 3 on the US music charts and went Number One in the UK (apologies for channeling Casey Kasem).

3. It is nice that TMZ finally acknowledged that celebrities might have assets in a trust which are not included in probate filings, but in this case that is misplaced. If a man did not have a will (his mom is asking to be appointed as administrator, she is not designated as executrix in his will), he did not have a trust.

4. Unsurprisingly, like most Millenials and Gen Z-ers, Mr. WRLD apparently did not own any stocks or bonds. Consider his heirs fortuitous.

Photo Credit:  @JustinMyView/R1 Digital
License:  Fair Use/Education (from linked article)

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)

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.

When Gloria died last year, she left the bulk of her $41 million fortune to two interior designers while omitting her step-son entirely.

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)

Self Care

Mac Miller is a rapper whose music I am unfamiliar with, but whom my children have seen in concert. He died last year of a drug overdose involving fentanyl. Surprisingly, he left behind a will and a trust. Several weeks ago, we learned that his estate was valued at $11.3 million and that he left various personal items to his friends (think laptops, guitars, and jewelry) and his financial assets of $5 million and musical royalties and master recordings valued at $6.5 million to his family.

Several points:

1. Kudos to Mr. Miller for being the rare 26 year old to prepare a will and trust.

2. His estate will likely not have to pay any federal estate taxes because administration expenses (and perhaps state estate taxes) will reduce the net value below the $11.2 million in effect last year.

3. For an artist with a short career with a limited reach and the decline of physical media, a value of $5 million for the master recordings seems optimistic.

Photo Credit: Mac Miller Instagram 
 License: Fair Use/Education

Mile High Litigation

Pat Bowlen was the long time owner of the Denver Broncos. He died this past June of Alzheimer’s Disease. He created a trust in 2009 to hold and operate the Broncos.  In 2013, he stepped away from the team and turned control of it to the three trustees.

The trust provides that the trustees will pick one of his 7 children to operate the team. The trustees are reported to have selected his 29 year old daughter, Brittany. Meanwhile, his two daughters from his first marriage have filed suit challenging his competency to execute a trust in 2009 when he was allegedly exhibiting signs of Alzheimer’s in 2006. The trust has a no contest provision which would cause the eldest daughters to lose their entire share of the trust by contesting it.

Several points:

1. Bowlen could have been suffering from Alzheimer’s while still having the required capacity to sign a will and trust i.e. know his assets, his heirs, and what his planning accomplishes.

2. Call it a hunch, but if Bowlen was incapable of managing his affairs, the NFL would not have permitted him to run the Broncos until 2013.

3. It is hardly a news flash that a trust dispute pits children from a first marriage against children from the second marriage.

4. If Bowlen’s daughters wish to show their father was incompetent in 2009, they should point to the drafting of Tim Tebow in the first round by the Broncos.

Photo Credit:  Joe Amon for the Denver Post
License:  Fair Use/Education (from linked article)

Pedophile Will

So my blog prognostication abilities continue to be abysmal. In addition to the coroner determining that Jeffrey Epstein hung himself, he actually prepared a will two days before he died.

Epstein’s will left everything to a trust he created the same day as his will. Of course, the trust beneficiaries and its terms are private. His will designates two long time employees as co-executors of his estate and provided that they would each receive $250K for serving in that capacity. Meanwhile, an attorney for one of the women suing Epstein claims that he was an evil genius for filing the estate in the U.S. Virgin Islands.

Several quick points:

1. Epstein’s estate is being probated in the US Virgin Islands because that is where he was considered a resident. Estates are probated in the decedent’s state of domicile.

2. The NY Post’s expert who said the will was filed in the Virgin Islands due to privacy reasons and the attorney suing Epstein on behalf of his alleged victims who thinks the US Virgin Islands filings are pure evil are fools and need to brush up on probate law.

3. It is interesting that the executors have agreed to fill that role for $250K. The commissions for executors are set by statute. Typically, they would receive a percentage of the estate which would be at least 1% or $5.7 million in this matter.

4. The reporting by the NY Post and the NYT has been error filled on this matter. I expect shoddy reporting from them on matters involving President Trump and from the Cincinnati Enquirer, but not from the NYT on a story like this.

Photo Credit:  NY Post  Composite

License:  Fair Use/Education (from linked article)

Fake News

CNN news anchor, Anderson Cooper, is the son of Gloria Vanderbilt who died last month at the age of 95. She in turn was the great-great-granddaughter of Cornelius Vanderbilt. She left all of her estate to Cooper save for her $1.2 million Manhattan co-op which she left to her son, Stan Stokowski.

Gloria Vanderbilt inherited a trust fund worth $35 million in today’s dollars when she turned 21. She also rode the wave of the designer jeans trend in the late 1970’s with her eponymous fashion which was worth $100 million at one time. Initial reports soon after her death speculated that she was worth $200 million. Probate Court filings have since revealed that she only owned her co-op and $1.5 million.

Several points, none too shocking:

1. The data about her net worth would be private if Vanderbilt had used a funded trust for her estate planning.

2. Rare is the fortune that lasts five generations before it is dissipated.

3. Four divorces, dedication to philanthropy, advisors who embezzle, and living into one’s 90s deplete one’s assets.

4. An incredibly gifted plastic surgeon will also deplete assets.

Photo Credit:  Unknown
License: Fair Use/Education

Don't Do Me Like That

When Tom Petty died of a drug overdose 18 months ago, he was survived by his second wife, Dana York, and his two daughters from his first marriage, Adria and Annakim. Petty created a trust to administer and distribute his assets. He named his widow as the trustee. He also directed that his music rights and royalties be transferred to a company to be managed equally by his widow and daughters.

His wife believes “equally” means a 50/50 split of management while the daughters contend that “equally” means they each get a vote for 2/3 control. The eldest daughter has opposed a 25th anniversary release of Petty’s last good album, Wildflowers, and has flamed various members of his band and the City of Gainesville. His widow has petitioned the LA probate court to appoint a day to day manager of the estate and requested that Adria act respectably.

Several quick points:

1. No matter how much planning a person does, there is no guarantee that his heirs will behave after his death.

2. Second marriages are always ripe for irrational emotional reactions after a death.

3. The estate planning attorney likely wishes he had defined “equally” in the trust.

4. A bank trustee can sometimes diffuse some of a beneficiary’s distrust, but not always. And usually not with someone as ill tempered as Adria.

5. In the streaming music era, the expected windfall from the re-release of Wildflowers is illusory. No one under 50 buys CDs.

Photo Credit:  NY Post? - vidcap
License:  Fair Use/Education (from linked article)

If It Is Not One Thing, It Is Something Else

Your chances of death rated by activity. Climbing in the Himalayas is definitely a death wish, as is base jumping (and its cousin, wing suit flying). As a cyclist, I am bummed out to see the somewhat high risk of death for cycling.

Be careful out there. And prepare a will.

Source: besthealthcaredegress.com
License: Fair Use/Education

Suspicious Minds

It has been a slow month for celebrity estate planning news. Lisa Marie Presley is embroiled in a lawsuit with her financial manager claiming he mismanaged her $100 million trust and left her with $14,000. She alleges that the manager sold 85% of her ownership in Elvis Presley Enterprises in 2005 for $100 million but invested most of the proceeds in the company which owned American Idol which filed for bankruptcy in 2016. She is also in the midst of a divorce from her fourth husband who is seeking $263,000 in annual alimony payments. She claims to owe $10 million in back taxes and $6 million in other debts.

Lots to digest.

1. The manager has countersued for $800K for unpaid investment fees. He alleges that Lisa Marie has a spending problem.

2. Allegedly, $20 million of the $100 million sales proceeds were used to pay off debts she had accumulated at the time.

3. Lisa Marie’s mother was concerned enough about her ability as a high school dropout to manage the inheritance that she was able to delay the distribution from Elvis’ trust until she turned 30.

4. Call it a hunch, but I suspect that Lisa Marie’s drug abuse, uncontrolled spending, and four marriages have as much to do with the financial straits as poor fiscal management.

Photo Credit:  Unknown

License:  Fair Use/Education (used in linked article)

#MeToo (#SheWasFirst)

William Agee was a boy wonder corporate exec in the late 70's and early 80's when he helmed Bendix Corporation. Mary Cunningham was a Harvard MBA grad voted most likely to be CEO of a non-cosmetics company. She spurned job offers on Wall Street to work for Bendix as Agee's personal assistant before being promoted to Vice President. They eventually divorced their spouses and married each other while ignoring rumors that Cunningham had "slept her way to the top."

After Agee's several failed business deals reportedly undertaken under Cunningham's advice, Cunningham became known as the Yoko Ono of finance. They settled in Napa Valley where Cunningham acquired the moniker of "Tomato Lady" for growing special tomatoes.

Six weeks before he died, Agee, reportedly suffering from dementia, changed his will to leave half his assets to his children from whom he had been estranged for 35 years. He also filed for divorce from Cunningham and named his daughter as his health care power of attorney. His last communication with his wife was via Face Time from Seattle. Cunningham is challenging the will although it does not matter because most of his assets were in his trust which was unchanged before his death.

A few points:

1. A will change six weeks before death to benefit children who have been estranged for 35 years will always generate questions of competency..

2. If Agee changed his will prior to his death, he should have also changed his trust if his assets were titled in the name of the trust.

3. Yoko Ono of finance? Tomato Lady? Music fans could only wish that Yoko Ono had grown tomatoes instead of creating unlistenable music and breaking up the Beatles.

Photo Credit:  Mary Moritz for the New York Times

License:  Fair Use/Education

No Winning Here

Barbara Schwartz was a Manhattan socialite who was stabbed to death by her shut-in son, Jonathan, in 2011. She was survived by second husband, Burton Fischler, the son who killed her, and a second son, Kenneth. Her estate was estimated at $6 million at the time of her death.

In the six years since her murder, her widower allegedly lost $4.3 million of her estate in six months due to poor financial management including day trading, Kenneth committed suicide in 2013 when he learned of the financial losses, and Jonathan was found not guilty by reason of insanity. Schwartz’s first husband is now in charge of the estate and has sued to stop Kenneth from inheriting her estate. Got it? Jonathan killed her and survived. Kenneth did not kill her and committed suicide.

As if that is not complicated enough, Fischler is now challenging the pre-nup he and Schwartz signed in 2000. He claims that he signed it under pressure from her family and that he received bad legal advice. He also claims that Schwartz promised him she would tear it up later. His share of the estate under the pre-nup is $1.25 million which is in trust.

There are so many fun issues, let’s address a few:

1. The inheritance of the mentally ill son is being challenged under NY’s Slayer Statute which prohibits individuals from inheriting due to killing someone.

2. The ex-husband is not a truly disinterested party in trying to stop his son from inheriting from Mrs. Schwartz. If the committed son does not inherit, his share will go to the share of the son who committed suicide. Because that son is deceased and did not have children, his share will go to his father (the ex-husband).

3. I think that Fischler might have a statue of limitations issue with his challenge to the pre-nup. Post-2008, NY has a 3 year statute of limitations for such challenges which does not apply to prior pre-nups. That statute was six years although it did not start running during the marriage during some areas of NY. Either way, the statute is most likely applicable to challenges from divorce, not death.

4. Fischler’s arguments for contesting the pre-nup seem to be in the “let’s throw a bunch of mud and hope something sticks” vein. The poor legal advice line might work in a death penalty case with a court appointed attorney but should not work in a pre-nup matter where Fischler chose his own attorney. President Trump would likely call Fischler a “loser.”

Photo Credit:  Unknown/NY Daily News
License:  Fair Use/Education

Bad Mom

Ken Thompson was the Brooklyn District Attorney who died of cancer in October.  Two weeks prior to his death, he allegedly changed his will to omit any bequest to his mother and instead left his estate in trust for his wife and 2 young children.  

His mother is contesting the will alleging that he did not know what he was doing due to his illness.  As support for her theory, she argues that Thompson was unhappy with his marriage because of the amount of money his wife was spending.

Three quick points:

1.  It is anything but unusual for a man with young children to leave his entire estate to his wife and children.  Providing for a mother is what would be unusual.  

2.  The creation of trusts to assist his wife with financial management of the inheritance shows mental clarity not lack of mental capacity.

3.   If Thompson was unhappy with his wife’s spending, he is in the majority of husbands.

                                         License:  Fair Use/Educational Purpose
                                         Copyright Alex Rudd/NY Daily News

That Is Not Amore

Madeline Castellotti was the co-owner of famed NYC pizzeria, John's Pizzeria. Prior to her death in 2004, she changed her will to leave her entire interest in the restaurant to her daughter, Lisa. She allegedly did so because her son, Peter, was going through a divorce and she did not want his estranged wife to receive any interest in the restaurant. Lisa was supposed to transfer half of her inheritance to Peter after the divorce was finalized. When she did not, Peter sued Lisa. An NY appeals court recently ruled that his 3 year old lawsuit may proceed.

Several points:

1. Typically inherited assets are not subject to division in a divorce proceeding. They remain with the person who inherited them unless they are commingled.

2. The mother would have been wise to use a trust to hold assets intended for her son rather than relying on her daughter to transfer the assets to him.

3. The transfer by Lisa to Peter of assets in excess of $1 million prior to 2011 would have resulted in Lisa paying a gift tax. 

4. Ironically, John's Pizzeria only serves entire pizzas and does not serve pizza by the slice.