Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Sunday, October 21, 2018

Paul Allen's $26 Billion Estate Will Take Years to Unravel

PaPaul Allen had no children nor spouse to divide his vast holdings through his parent company of Vulcan, assets that included real estate, art, sports teams, and venture capital stakes. But there are many others with possible interests, including family, staff and charities, as well as potential investors.

Darren Wallace, an attorney for Day Pitney who handles estate affairs for high-net-worth clients, predicts that “even if things go along as you might expect, it could easily be three to five years." At least half his $26 billion fortune is probably earmarked for charitable purposes after he joined the Giving Pledge almost a decade ago, and an estate tax bill will apply on much of what remains.

Lori Mason Curran, Vulcan Inc.’s director of real estate investment strategy, said no changes are imminent for Allen’s network of interests, including the investment firm itself. “Paul thoughtfully addressed how the many institutions he founded and supported could continue after he was no longer able to lead them,” she said in an emailed statement, without elaborating. “Now, is the time to focus on Paul’s life and allow his family and friends space to grieve. We will continue to work on furthering Paul’s mission and the projects he entrusted to us.”

See Noah Buhayar & Simone Foxman, Paul Allen's $26 Billion Estate Will Take Years to Unravel, Financial Advisor, October 18, 2018.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

October 21, 2018 in Current Events, Estate Administration, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Friday, October 19, 2018

Murdoch Children May Get up to $2bn Each in 21st Century Fox Sale

MurdochRupert Murdoch’s six children could each receive as much as $2 billion from the sale of his 21st Century Fox global entertainment empire to Disney. Murdoch's family trust owns a 17% interest in Fox, and that totals to a $12 billion to be split among the beneficiaries: Prudence, James, Lachlan, Elisabeth, Grace and Chloe. The last two children are from his ex-wife that he divorced five years ago and they are beneficiaries but have not voting power.

The $12 billion is the maximum the trust could receive, as there is still a hefty tax implication with the sale of the empire. Tax experts believe Murdoch would end up having to accept a “roughly”50/50 mix between cash and Disney shares for the family trust’s holding. This would mean a bill of up to $2 billion and more like a $10bn windfall for the trust and its beneficiaries.

Murdoch and his eldest son, Lachlan, are to continue to work side by side following the Fox sell-off, with the son being the chairman and chief executive of New Fox and Murdoch co-chairman. The youngest son, James, currently 21st Century Fox’s chief executive, had been set for a potential role at Disney following completion of the deal but is instead striking out on his own. It has been rumored that he might take over at Tesla as chairman after Elon Musk steps down next month.

See Mark Sweney, Murdoch Children May Get up to $2bn Each in 21st Century Fox Sale, The Guardian, October 18, 2018.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

October 19, 2018 in Current Affairs, Current Events, Estate Planning - Generally, Film, Television, Trusts | Permalink | Comments (0)

Thursday, October 18, 2018

Paul Allen May be Leaving Largest Estate in Washington History

PaPaul Allen constructed an empire over the 35 years after he left Microsoft that consists of funding local museums and arts festivals, sponsoring brain science and artificial intelligence research institutes, and even owning sports teams and an enormous real-estate portfolio. The disposition of possibly the largest estate in the history of the state of Washington poses many questions of the future of these endeavors, and the Internal Revenue Service will be poring through all of it.

There is familial continuity built in to the structure of Allen’s empire even though he was not married and had no children. His sister, Jody, helped carry out many of his endeavors. But there are early signs of how various pieces of the Allen empire have been subtly restructured to operate more independently. And rumors have already started about possible sales of Allen’s sports franchises, the Seahawks and Portland Trail Blazers.

Large estates such as Allen's have their assets moved into a revocable living trust. Engineered to administer an estate, a trust serves in place of a will, but is not subject to the traditional court process of probate. But the issue of estate taxes remain, with substantial estates facing the possibility of being hit with a combined federal and state estate tax rate as high as 52%.

Douglas Lawrence, a lawyer whose practice includes planning and probate matters at the law firm Stokes Lawrence, says that “It all boils down to: What’s the value of that enterprise?” He expects the process to take a full nine months, and he would not be surprised if the estate asks tax authorities for an extension.

See Matt Day, Paul Roberts, & Benjamin Romano, Paul Allen’s Death Leaves Many Questions Around What’s Likely the Largest Estate in Washington History, The Seattle Times, October 17, 2018.

Special thanks to Jay Brinker (Cincinnati Estate Planning Attorney) for bringing this article to my attention.

October 18, 2018 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, Non-Probate Assets, Technology, Trusts, Wills | Permalink | Comments (0)

Article on The New Uniform Directed Trust Act Paves the Way for Creative and Thoughtful Divided Trusteeship

TrusteesJohn Morley & Robert H. Sitkoff recently published an Article entitled, The New Uniform Directed Trust Act Paves the Way for Creative and Thoughtful Divided Trusteeship, Wills, Trusts, & Estates Law eJournal (2018). Provided below is an abstract of the Article.

This chapter summarizes the four areas of practical innovation of the Uniform Directed Trust Act (UDTA). The first is a careful allocation of fiduciary duties. The UDTA’s basic approach is to take the law of trusteeship and attach it to whichever person holds the powers of trusteeship, even if that person is not formally a trustee. Thus, under the UDTA the fiduciary responsibility for a power of direction attaches primarily to the trust director (or trust protector or trust adviser) who holds the power, with only a diminished duty to avoid “willful misconduct” applying to a directed trustee (or administrative trustee). The second innovation is a comprehensive treatment of non-fiduciary issues, such as appointment, vacancy, and limitations. Here again, the UDTA largely absorbs the law of trusteeship for a trust director. The UDTA also deals with new and distinctive subsidiary problems that do not arise in ordinary trusts, such as the sharing of information between a trustee and a trust director. The third innovation is a reconciliation of directed trusts with the traditional law of co-trusteeship. The UDTA permits a settlor to allocate fiduciary duties between co-trustees in a manner similar to the allocation between a trust director and directed trustee in a directed trust. The fourth innovation is a careful system of exclusions that preserves existing law and settlor autonomy with respect to tax planning, revocable trusts, powers of appointment, and other issues.

Prepared for the 2018 Heckerling Institute on Estate Planning at the University of Miami, this chapter is an abridgment of John D. Morley & Robert H. Sitkoff, Making Directed Trusts Work: The Uniform Directed Trust Act, 44 ACTEC L.J. 1 (2018, Forthcoming), available at:

https://ssrn.com/abstract=3256987.

October 18, 2018 in Articles, Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Brothel Owner-Turned-Politician Dennis Hof Found Dead at Love Ranch

NevadaGrand Ol' Party Nevada legislature hopeful Dennis Hof, 72, died at his own brothel Tuesday after a campaign rally the evening before. There has not been any inclination of foul play, simply that he “went to sleep last night and didn’t wake up,” Nye County spokesman Arnold Knightly told the Reno Gazette Journal. His campaign manager, Chuck Muth, confirmed Hof's death on Twitter. “Ron Jeremy found him this morning when he went to wake him to go to a meeting.”

Hof had been running for Nevada Assembly and over the summer bested a Republican incumbent in a state primary for the southern Nevada district. Interestingly, due to Nevada election law, he will still be listed on the ballot in November, but signs will be posted at polling places in the district alerting voters that he has died.

If he manages to win from beyond the grave, the seat would be considered vacant, Nevada deputy secretary of state for elections Wayne Thorley told the Gazette Journal.

See Max Jaeger, Brothel Owner-Turned-Politician Dennis Hof Found Dead at Love Ranch, New York Post, October 16, 2018.

October 18, 2018 in Current Affairs, Current Events, Estate Planning - Generally | Permalink | Comments (0)

Chinese Woman Kills Herself and Children After Husband 'Fakes Death'

HeA 34-year-old Chinese man identified as Mr. He purchased an insurance plan worth one million yuan in early September without informing his wife about it. He had also named his wife as the beneficiary on the plan. Later that month, the car that Mr. He had borrowed was found in a river, though his body was never recovered.

Three weeks later on October 11, the bodies of his 31-year old wife, 4-year-old son and 3-year-old daughter was found in a pond near their home. A suicide note written by the wife had also been posted online before the bodies were found. Mr. He turned himself in to authorities the next day after he issued an online video in which he was crying and saying he had borrowed money to pay for treatment for his 3-year-old daughter, who suffered from epilepsy.

It has been determined that Mr. He had loans of more than 100,000 yuan. Mr. He has been detained on charges of insurance fraud and intentional damage to property, Xinhua police said in a statement.

See Chinese Woman Kills Herself and Children After Husband 'Fakes Death,' BBC, October 17, 2017.

Special thanks to Jay Brinker (Cincinnati Estate Planning Attorney) for bringing this article to my attention.

October 18, 2018 in Current Events, Estate Planning - Generally, New Cases | Permalink | Comments (0)

Wednesday, October 17, 2018

Dissecting Trump’s Inheritance and Tax History

Trump2New York Times reporter Susanne Craig was one of the authors of the 14,000 word expose of President Donald Trump's supposed $413 million inherited fortune and alleged tax evasion. She explains that she is disappointed that the story did not stay in the national spotlight for very long, but that she expects the investigative work the Times put in to play a role in his upcoming bid for reelection.

“We were able to get hundreds of thousands of tax returns, tens of thousands of pages of financial documents,” she said. “And that quest that lasted a year-plus allowed us to attack the foundational lie that Donald Trump is a self-made billionaire.”

POLITICO’s Jack Shafer also had a say on why the story did not dominate headlines. “It’s just that, for want of a better word, it just was not a sexy topic. There are no mistress payoffs. There are no stolen elections. What you have is just a fundamental accountant’s fantasy.”

See Ben White, Dissecting Trump’s Inheritance and Tax History, Politico, October 17, 2018.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.

October 17, 2018 in Current Events, Estate Planning - Generally, Income Tax | Permalink | Comments (0)

Ongoing CLE: 2018 National Conference on Special Needs Planning and Special Needs Trusts

CLECelebrating 20 years, the 2018 National Conference on Special Needs Planning and Special Needs Trusts is the premier conference for you and your colleagues to attend! This conference is a must for anyone working in the field of special needs planning. The conference offers three pre-conference intensives Tax, Pooled SNTs and Veterans Benefits along with the two-day national conference.

Pre-Conferences | Wednesday, Oct. 17, 2018

  • Tax Intensive: This full-day program, with breakouts, will focus on the tax issues in special needs planning from experts in the field of tax and planning from across the country.
  • Pooled Trusts Intensive: This full-day program, with breakouts, will focus on issues for pooled trusts administrators, attorneys and others who work with pooled trusts.
  • Veterans Benefits Intensive: This half-day program, will feature three hours of training on veterans benefits with the Honorable Michael P. Allen, U.S. Court of Appeals for Veterans Claims, and Professor Stacey-Rae Simcox, Stetson University College of Law. It will also feature an overview of the Office of General Counsel of the Department of Veterans Affairs by the VA General Counsel, and an update from Chief Judge Robert N. Davis, U.S. Court of Appeals for Veterans Claims.

VA accreditation requires approval from a State bar association and must also satisfy the requirements of 38 C.F.R. § 14.629(b)(1)(iii), Stetson University College of Law will apply to the state of Florida for CLE credit and the agenda will meet the requirements of 38 C.F.R. § 14.629(b)(1)(iii). Attendees will then be required to submit on their own for VA accreditation. 

National Conference | Oct. 18–19, 2018

  • The conference will start on Thursday and Friday mornings with general sessions on a variety of important topics, followed by breakout sessions on cutting-edge topics in the afternoon. Friday morning starts with a presentation by Samara Richardson, associate commissioner for the Office of Income Security Program (via video conference) followed by the not-to-be-missed experts panel. The conference closes with the popular The Update by Robert W. Fechtman and Robert B. Fleming.

October 17, 2018 in Conferences & CLE, Current Events, Elder Law, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0)

Tuesday, October 16, 2018

Microsoft Co-Founder Paul Allen Dies of Cancer at 65

PaPaul Allen, co-founder of Microsoft, died from complications of non-Hodgkin’s lymphoma on Monday afternoon. Allen was 65 years old and revealed earlier this month that he was receiving treatment for the disease, the same disease he had fought and conquered in 2009.

Allen ranked among the world’s wealthiest individuals. As of Monday afternoon, he ranked 44th on Forbes’ 2018 list of billionaires with an estimated net worth of more than $20 billion. He was also the owner of the Seattle Seahawks and the Portland Trail Blazers. He was an avid electric guitarist who enjoyed jamming with celebrity musicians such as Mick Jagger and Bono, and he funded the Experience Music Project in Seattle (now dubbed the Museum of Pop Culture), devoted to the history of rock music and dedicated to his musical hero Jimi Hendrix.

Vulcan CEO Bill Hilf said, “All of us who had the honor of working with Paul feel inexpressible loss today.” Vulcan is a network of philanthropic efforts and organizations that Allen utilized to support research in artificial intelligence and new frontier technologies. The group also invested in Seattle’s cultural institutions and the revitalization of parts of the city.

Bill Gates, who co-founded Microsoft with Allen, said that “personal computing would not have existed without him.”

See Christine Wang, Microsoft Co-Founder Paul Allen Dies of Cancer at Age 65, CNBC, October 15, 2018.

October 16, 2018 in Current Events, Estate Planning - Generally, Sports, Technology | Permalink | Comments (0)

Monday, October 15, 2018

A Daughter’s Hilarious Obituary Unravels her Father’s Mysterious Life

WalshRick Stein's obituary ran last week in Delaware Online. The article was written by his daughter Alex Walsh who claims that her father had a healthy appetite for humor as well as life itself. The tale speaks of a man who disappeared in a single-engine plane over the Atlantic Ocean after learning he had cancer. "Security footage shows Stein leaving the building at approximately 3:30 Thursday afternoon, but then the video feed mysteriously cuts off."

Walsh, 45, a former television news writer in Washington, D.C., wrote that, “It seems no one in his life knew his exact occupation.” Stein's brother is sure that he did not know how to pilot and that they owned a jewelry and Oriental rug gallery together. His sister says she thought Stein was a cartoonist and freelance television critic for the New Yorker. The rest of the family seemed at odds of what their patriarch did with his time, as well.

His wife of 14 years and Walsh's stepmother, Susan Stein, could not be interviewed about her husband's disappearance. "[N]eighbors say they witnessed her leaving the home the couple shared wearing dark sunglasses and a fedora, loading multiple suitcases into her car. FAA records show she purchased a pair of one-way tickets to Rome which was Mr. Stein’s favorite city. An anonymous source with the airline reports the name used to book the other ticket was Juan Morefore DeRoad, which, according to the FBI, was an alias Stein used for many years.”

Alex Walsh then finished the obituary with, “That is one story. Another story is that Rick never left the hospital and died peacefully with his wife and his daughter holding tightly to his hands.”

See Allison Klein, A Daughter’s Hilarious Obituary Unravels her Father’s Mysterious Life. You Have to Read to the End to Get it, Washington Post, October 11, 2018.

October 15, 2018 in Current Events, Estate Planning - Generally, Humor | Permalink | Comments (0)