Wills, Trusts & Estates Prof Blog

Madonna, Vogue and The Estate of Marlon Brando

Madonna's song "Vogue" lists of various Hollywood icons and everytime that it is performed, Madonna pays the estates of each of those icons.  For example, when she performed "Vogue" at the superbowl last year, she paid $3,750 each to estates of James Dean, Jean Harlow, Ginger Rogers, Bette Davis, LanaTurner, Greta Garbo, Marlene Dietrich, Gene Kelly, Grace Kelly, and Joe DiMaggio. CMG Worldwide manages the intellectual property rights of many of these dead stars.  

After the Super Bowl, Madonna wanted to go on tour to support her latest album and she wanted to play Vogue again.  To facilitate this, the touring company, Bhakti Touring, Inc. went to CMG for help gaining clearance for use of the dead starts' publicity rights, including Brando's.  Since CMG does not represent the rights of Marlon Brando, they began negotiations with Brando Enterprises and its agent at Brand Sense Partners (BSP). When Madonna performed Vogue at the Super Bowl, CMG was able to get an agreement with BSP indicating that the Brando estate would be paid $3,750 just like all the other stars. When CMG went to BSP about Madonna's tour, they made the same proposal. Shortly after, CMG convince Bhakti to agree to pay $5,000 for each celebrity, but in the last week of May, BSP allegedly began demanding that Bhakti pay Marlon Brando $20,000.  

As a result of these new demands, CMG filed a low-key lawsuit in Indiana state court alleging that Brando Enterprises and BSP reneged on a valid and enforcable contract.  Among other things, they are also demanding that Brando's estate and its agents do not bring any lawsuits against CMG, Bhakti, and Madonna claiming that they violated Brando's intellectual property.

On Wednesday, Brando Enterprises got the lawsuit removed to federal court in Indianapolis on the basis of diversity jurisdiction.  They are planning to show that Brando's IP rights far exceed $5,000 and that Madonna exploited Brando's IP in about 90 different concert performances. 

See Eriq Gardner, Lawsuit Aims to Stop Marlon Brando Estate From Suing Madonna Over 'Vogue' (Exclusive), The Hollywood Reporter, Sept. 28, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this blog to my attention.

Women Choosing Not to Work

Wealth Management wanted to find out if women were well represented in the financial services, RIA market. Upon investigation, they had trouble finding 25 women owned RIAs in a list of 400 RIAs, indicating that women are not so well represented in the RIA market.  Even though women may be underrepresented in the industry, maybe that is just because women are choosing to stay home and nurture children instead. Sexism and discrimination don't have to be the driving forces behind the number of women in the workplace.  Instead, that number is likely set by women's desire to have a baby and take time out of work.

See David Geracioti, Women Are Getting Richer and Taking Charge of Wealth.  But There are Few Women-owned RIAs, WealthManagement.com, Sept. 28. 2012. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

More on the Brooke Astor Estate Auction

As I have previously discussed, Brooke Astor's Estate recently held an auction and earned quite a bit of money on a few of the items it has already auctioned. At the end of the auction, the estate earned about $18.8 million to donate to the charities of Ms. Astor's choice. This is good news for the estate because her property earned twice what the estate expected to earn. With the end of the auction comes the end of the administration of the late-socialites estate. So ends the sad story of the administration of Brooke Astor's estate. 

See The Reliable Source, In Other News...: Brooke Astor Estate Auctioned for $18.8 Million, Washington Post, Sept. 26, 2012. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

CLE on Medicaid Planning

On Wednesday, October 17, 2012, the ALI-ABA is hosting a CLE entitled Practical Medicaid Planning: Advising Your Clients.  The CLE will be from 1:00 p.m. to 2:30 p.m. Eastern and is offered via telephone seminar or audio webcast.  You will learn the following: 

This 90 minute audio-only program will explore various topics related to Medicaid and planning for Medicaid, including (but not limited to):

• Significance of payment of debts and expenses
• The community spouse resource allowance
• Transfer rules
• Distributions from inter-vivos trusts
• Tax issues in elder law
• Why you must read Medicaid not as a trust and estates lawyer but from the point of view of public benefits.

Though primarily designed for estate planning attorneys, tax lawyers and other professionals handling Medicaid issues will benefit from this program, which is co-chaired by Mark Levin of the Law Office of Mark Levin in Roseland, New Jersey, and Leonard Pasculli of Hollander, Strelzik, Pasculli, et al. in Newton, New Jersey.

Please click here for more information. 

Letters on Perpetual Trusts

Lawrence W. Waggoner (Lewis M. Simes Professor of Law Emeritus, University of Michigan Law School) and Calvin H. Johnson (Andrews & Kurth Centennial Professor, The University of Texas at Austin School of Law) recently published their article entitled 'Perpetual Trusts: The Walking Dead' and 'Congress Should Effectively Curb GST Exemption for Perpetual Trusts,' Tax Notes, Vol. 136, No. 10 (2012).  The abstract available on SSRN is below: 

In separate but complementary letters to the editor of Tax Notes, Calvin Johnson (University of Texas School of Law) and Lawrence Waggoner (University of Michigan Law School) respond to an article by Dennis Belcher and seven other practicing attorneys that defend the GST exemption for perpetual trusts. In Federal Tax Rules Should Not Be Used to Limit Trust Duration, 136 Tax Notes 832 (Aug 13, 2012), the attorneys argue that the duration of a trust is a state law issue. Their article is actually a response to a Shelf Project article: Lawrence W. Waggoner, Effectively Curbing the GST Exemption for Perpetual Trusts, 135 Tax Notes 1267 (June 4, 2012), Doc 2012-9442, 2012 TNT 110-14, available electronically at http://ssrn.com/abstract=2083804.

In Perpetual Trusts: The Walking Dead, 136 Tax Notes 1215 (Sept. 3, 2012), Johnson argues that the harm to the national wealth done by perpetual trusts is a federal responsibility. Trusts reduce the value of wealth, and settlors could figure that out if they were not seduced by the tax exemption. Specific settlor instructions get out of date and become an impediment after a generation. Delegating to trustees accountable to no one means trusts are managed primarily for the benefit of the trustees. Perpetual trusts become monsters, the walking dead. The federal exemption is motivating the harm; federal law is responsible for the harm that perpetual trusts cause.

In Congress Should Effectively Curb the GST Exemption for Perpetual Trusts, 136 Tax Notes 1216 (Sept. 3, 2012), Waggoner reaffirms his Shelf Project proposal and his criticism of the Treasury Department’s proposal for dealing with perpetual trusts. The Treasury Department’s proposal would leave many trusts and much wealth GST exempt for much longer than Congress originally intended. The Waggoner proposal, if enacted, would be much more effective. Belcher and the other attorneys argue that Congress should do nothing (a position refuted by Johnson), but if Congress is to do something, the attorneys essentially embrace the Treasury proposal.

Estate Tax Liability For Americans Under Three Different Scenarios

When it comes to estate tax, a recent study indicates there are three proposals that Congress is most likely to consider: (1) Let the estate tax law revert back to $1 million and 55% maximum tax; (2) extend the current law with $5 million exemption and 35% maximum tax; or (3) enact a compromise of $3.5 million exemption and 45% maximum tax.

If Congress does not take action regarding the estate tax by the end of the year, 15 million U.S. households will owe estate tax. While only 4.4 percent of households have financial assets greater than $1 million, other assets are included in estate tax calculation.  Households can use life insurance proceeds on the deceased to pay estate tax, but the LIMRA analysis indicates that 55% of these households do not have enough coverage to pay the tax.

 If Congress extends the existing law, 2.4 million households would have a potential estate tax liability.  43% of these households do not have enough coverage to pay the tax.

If Congress agrees to a compromise of $3.5 million exemption and 45% tax rate, 3.6 million households would have a potential estate tax liability.  53% of households do not have the coverage to pay this tax. 

See Warren Hersch, LIMRA: More Than 1 in 8 U.S. Households May Owe Estate Tax in 2013, LifeHealthPro, Sept. 27, 2012. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Lecture on Estate Planning for Resident and Non-Resident Aliens

Stephanie E. Heilborn (Partner, Fulbright & Jaworski, New York) & Monika Jain (Counsel, Phillips Nizer, New York) recently gave a lecture for a webinar entitled, Estate Planning Involving Resident and Non-Resident Aliens—Navigating Estate, Gift, and GST Tax Rules and Leveraging Estate and Lifetime Gifting Opportunities, (Webinar, Strafford Publications, Sept. 20, 2012). A link to the webinar's lecture slideshow has been provided above.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

German Inheritance Policy

In Germany, the country's laws state that domestic residents can take a €500,000 exemption on inheritances and gifts, while it restricts the exemption to €2,000 if the testator and the heir are not residing within the geographic boundaries of Germany. As a result, the European Commission (EC) referred the nation to the European Commission's Court of Justice. The commission determined that not only was the law discriminatory but also a burden on the free movement of capital. This last determination is provided for in the treaties between the European Countries. 

See Taxation: Commission Refers Germany to the Court of Justice for Discriminatory Inheritance Tax Provisions, Press Release: European Commission, Sept. 27, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this blog to my attention.

Windsor Takes Her Fight to the Second Circuit Court of Appeals

Edie Windsor was at the Second Circuit Court of Appeals in New York defending the victory she obtained at the lower court. Windsor's main concern at the moment is her health because she is struggling with a number of illnesses. She hopes that she can get the situation resolved before her death. Other than that, Windsor seems to be in good spirits and is happy that she is the face of the fight against the Defense of Marriage Act. At the Second Circuit, BLAG or the Bipartisan Legal Advisory Group defended the law on the argument that the federal circuit should apply the precedent that the United States Supreme Court has already established. The court did not issue a ruling today. In addition, the Supreme Court is expected to hear the matter within the next year.

See Abby Rogers, 83-Year-Old Lesbian Hopes She Can Survive Her Fight Against the Defense of Marriage Act, Business Insider, Sept. 27, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention. 

Who Really 'Built That"?

In response to Forbes's release of their annual toast to those who embody the American dream, the group United for a Fair Economy released a story that analyzed the people on that list to determine whether those people actually embody what that group considers the American dream. The story reported that, in fact, many people—about 40%—on the Forbes list "inherited a size-able asset from a spouse or family member." The report also noted that Forbes stated that only 30% of its list inherited their wealth from their family. The list claimed that 70% are entirely self-made. 

The report seemed to conclude that the American dream was a fabrication, and that many people on the list are there because they are product of their birth. Of course, this issue is entirely a product of how a person defines "self-made."

See Robert Frank, Did the Forbes 400 Billionaires Really 'Build That'?, CNBC Reporter & Editor, Sept. 25, 2012.

Special thanks to David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.

Sorting Out the Sherman Hemsley Estate

As I have previously blogged, after Sherman Hemsley died, a man came forth claiming to be Hemsley's brother. However, the executor that Hemsley named in his will says that she never heard Hemsley talk about family.

Hemsley's alleged family is claiming that the will is suspicious because it was made only a month before Hemsley died and the signature looks like it was traced.  

In order to sort out the conflicting claims, the judge has ordered a DNA test on Hemsley's alleged brother and on Hemsley. The family has until October 15 to do the DNA test. The next hearing is scheduled for October 31. 

See Judge Orders DNA Test From Hemsley's Relatives in Will Battle, 9HD, Sept. 24, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this blog to my attention.

Risk Assessment of Probate Matters in Arizona

Arizona has instituted a new system to monitor probate matters.  The state requires that probate cases be classified as minimum risk, moderate risk, or maximum risk.  Each file is to be evaluated and classified according to 39 indicators.  Some of those indicators include no family members, large estate, use of ATM's or gift cards, unauthorized gifts or loans, and health, business or personal problems of the fiduciary. Each category of risk requires court personnel to meet with the ward or beneficiaries--the only variance is how much contact is required.  

To see more of the indicators considered, please click here. 

See The Symptoms of Problem Estates, 12th Chancery Court District of Mississippi, Aug. 20, 2012. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Article on The Estate of Turner Opinion

Wendy C. Gerzog (Professor of Law, University of Baltimore School of Law) recently published her article entitled Another Turn With Turner.  The abstract available on SSRN is below: 

In its latest Estate of Turner opinion, the Tax Court decided whether a pecuniary formula marital deduction clause could shield the inclusion of family limited partnership assets in the decedent's estate.

Survey Says: Wealthy Families Need To Update Their Estate Plans

A recent survey by Rothstein Kass indicates that many wealthy families who can afford financial offices still have estate plans that are out of date.  Over 3/4 of the estate plans of the ultra-wealthy clients studied were at least three years old.  This was the case even though almost 95% of those families have experienced significant life changes since drawing up their estate plans. 

The survey also found that 53% of the wealthy families interviewed did not have formal asset protection plans and 84% of life insurance plans have not been reviewed in over three years. 

Single-family office executives should help clients understand how important it is to review estate plans. Creating the estate plan is just the beginning--maintaining it allows one to take advantage of more benefits. 

See Karen DeMasters, Estate Plans of Rich Families Out of Date, Survey Says, Private Wealth, Sept. 25, 2012. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

The Sad Song of Danny Tate

As I have previously discussed numerous times, Mr. Danny Tate has been the victim of conservatorship abuse in Davidson County, Tennessee. His story is quite long and unique; the number of incidents display how far abuse has gone in Tennessee. His conservatorship began with fraudulent action on the part of David Tate. Mr. Tate alleged that he had a durable general power of attorney over Danny Tate, which means that in the event of incapacitation he would be nominated to service as Danny Tate's conservator. He used this to gain control of the estate so that he could gain control of Danny Tate's assets. From that moment, Danny has fought his conservatorship. Finally in May of 2010, Danny received his day in court. Unfortunately, it was more of a spectacle and Tate was not actually released from his conservatorship. 

Even though the judge claimed that Tate was released from her conservatorship, he still has fought to regain his property and protect his assets. During the time, he incurred about $150,000 in debt from the attorney who served as his conservator. As I have previously discussed, Danny's house was placed up for auction to pay his legal bills. In the end, his attorney, Paul Housch, purchased Danny Tate's house.

See Lou Ann Anderson, The Financial Flogging of Nashville Songwriter Danny Tate, Examiner.com, Sept. 26, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this blog to my attention.

An Act of Adultery Does Not Defeat Claim to Spouse's Estate

A couple from Kentucky married in 2004 and separated about 4 months later. In the course of that time, the wife obtained a domestic violence order against her estranged husband, filed for divorce, and started a relationship with another man. Her estranged husband died in a work-related accident only a month later. During the course of their separation, the wife entered into a relationship with another man. The administratix of his estate, the mother of the husband, claimed that the ex-wife should not receive any of her share of the estate because she committed adultery while they were still legally married. In fact, the man that the wife started the relationship with even signed an affidavit stating that she and him had sexual relations the night before her estranged husband died. The mother claimed that the probate code states that if a person commits adultery, that person forfeits his or her spouse's estate.

The Supreme Court of Kentucky held in Griffin v. Rice that the one incident of adultery is not enough to activate the state's statute against allowing adulters from inheriting from his or her former spouse. The court stated that "while the adulterous activity need not be with the same person, it must be 'periodic or recurring, a sustained or notorious activity.'" In other words, the court stated that a person must commit more than one act of adultery. 

See One Act of Adultery Doesn't Defeat Claim to Deceased Spouse's Estate, Family Law Reporter, Sept. 27, 2012.

Special thanks to Naomi Cahn (John Theodore Fey Research Professor of Law, George Washington University School of Law) for bringing this article to my attention.

Anti-Money Laundering Statutes Are Stricter In Offshore Territories

A study has confirmed that statutes that regulate anti-money laundering and terrorism are stricter in offshore territories than within countries like the United States and the United Kingdom. In fact, the study concluded that it was easier to identify a shell company in the United States than poorer countries. The company that conducted the study noted that it was surprising to learn that people in these offshore territories and poorer nations were more likely to comply with rules and global standard than their richer counterparts. 

See Amanda Banks, AML Standards Highest in Offshore Territories, Tax-News.com, Sept. 26, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this blog to my attention.

Police Receive Tip About Jimmy Hoffa

The Detroit Police Department are investigating a tip that they received from man who lives in a Detroit suburban. The man claims that that 35 years ago he witnessed a body being buried. The man also believes that the body he witnessed being buried was that of Jimmy Hoffa, the Teamsters Leader. The police, however, are only searching for this person on the basis that they could potentially uncover a body. So the police have taken soil samples to determine whether the soil has been affected or shows signs of human decomposition. 

Jimmy Hoffa disappeared 35 years ago after a meeting with the Teamsters' boss. There are numerous theories about his disappearance but none have been proven true. The facts surrounding his disappearance are still very much a mystery. The problem with this current tip is that it does not play into what is known about the Hoffa disappearance. In fact, one of the officers re-marked that "the timeline doesn't add up."

See Corey Williams, Police Checking Out Hoffa Tip in Detroit Suburb, Associated Press, Sept. 26, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this blog to my attention.

Woman Stands to Inherit Up To $10 Million and Is Nowhere to Be Found

Arlene Magdanz has been identified as a first cousin of Walter Samasko Jr., and she stands to inherit $7 million to $10 million.  Despite her potential inheritance, she did not show up at the hearing regarding his estate yesterday.  

Samasko died at age 69 and only had $200 in his bank account upon death.  He was a loner and was not even discovered to be dead until neighbors complained of a foul smell that was emitting from his house.  As his house was being cleared out, gold and silver coins were discovered and are set to be sold.  The attorney handling the estate believes the coins are worth between $7 million and $10 million. 

At the hearing regarding the estate yesterday, the District Judge authorized the city clerk and public administrator to hire a firm that will ensure Magdanz is the rightful heir and an expert to value the estate. Once the value of the estate is determined, a CPA will determine how much inheritance tax is due.

See Cy Ryan, No Word From Teacher in line for $10 Million Inheritance, Las Vegas Sun, Sept. 26, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this blog to my attention.

Churches and Tax in Germany

German corporate law dictates that the state collect religious taxes from registered Catholics, Protestents and Jews.  The state then distributes what it collects to the religious communities. These funds help to run schools, hospitals, and charitable works. Roman Catholic bishops believe that German believers who refuse to pay the special church tax could be shut out of Catholic worship--and Germany's top administrative court agrees. 

The legal challenge to the tax began when a retired professor of canon wanted to stop paying the Catholic Church's tax, but continue to practice the religion.  Archbishop Robert Zollitsch points out that the church exists in Germany as a statutory corporation and one cannot abandon that legal status without abandoning the faith.  Zollitsch goes on to note that whoever wants to belong to the CHurch must contribute to the church what it needs to do its work. 

A Catholic reform movement says that the tax decree is questionable under Church law until it is approved by the proper Vatican department. 

See Tom Heneghan, German Court Backs Catholic Church Against Tax Opt-Outs, Reuters, Sept. 26, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this blog to my attention.