Wills, Trusts & Estates Prof Blog

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

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Monday, March 30, 2015

Dean Smith Gift to Former Players Described as Typical of His Coaching Style

Dean SmithAs I have previously discussed, roughly 180 former University of North Carolina basketball players will soon receive a $200 check from a trust created by their former coach, Dean Smith, with instructions to enjoy dinner on him. One of the former UNC players to receive a check is six-time NBA champion Michael Jordan, who described Smith as one of the largest influences in his life. Another player included as a recipient, Eric Montross, described Smith's inclusion of these gifts in his estate planning as a typical action of his former coach who was often making a point to teach his team lessons. Montross describes this lesson as one of friendship.

See Eben Novy-Williams & Rob Gloster, Dean Smith Dinner Bequest Is One of His ‘Lessons’ to Team, Bloomberg, March 26, 2015.

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

March 30, 2015 in Estate Administration, Estate Planning - Generally, Sports, Trusts | Permalink | Comments (0) | TrackBack (0)

Sunday, March 15, 2015

Article on Estate Planning for the International Professional Athlete

Evan JohnstonEvan Johnston (J.D. Candidate, Texas Tech University School of Law, May 2015) recently published an article entitled, Adapting to the Changing Face of American Sports: Estate Planning for the International Professional Athlete, 7 Est. Plan. & Community Prop. L.J. 339 (Fall 2014). Provided below is an excerpt from the article:

In modern times, the face of major American professional sports has changed dramatically from a national to a global enterprise. Consequently, issues facing an estate planner dealing with athletes has globalized as well. The use of real life hypothetical situations best explains the practical steps an attorney must take in order to best serve their international professional athlete client. For explanatory purposes, it is illustrative to consider two situations:

The first case is that of Shawn Bowman. Shawn is a nineteen year old ice hockey player from the farm town Lumsden, Saskatchewan, Canada, just outside of the City of Regina. Regina is one of the top producing cities of National Hockey League (NHL) players in the country. Shawn married his high school sweetheart, Jenny, and the following summer, the New York Rangers drafted him first overall in the NHL Draft. In concert with other first overall picks from previous years, Shawn signed a contract that promised to pay him a total salary of $3.75 million in his first year alone. Shawn moved to Manhattan to start his new career, purchased a nice apartment, and plans to continue to financially support his parents and their family farm back in Saskatchewan.

The second case is Nelson Smith, a dynamic twenty-five year old soccer star from Manchester, England . . . .

The purpose of this comment is to inform practitioners of the unique legal issues they may face if someone like Shawn or Nelson walks into their office. Both are noncitizens who will obtain a vast amount of money in a very short period of time, making their estate planning concerns both complex and delicate. When creating a holistic plan for an athlete, an estate planning practitioner should follow a step-by-step approach with special consideration towards the areas of: residency, tax calculation, asset beneficiary designation, life and disability insurance, and athlete image and endorsement issues.

March 15, 2015 in Articles, Estate Planning - Generally, Sports | Permalink | Comments (0) | TrackBack (0)

Saturday, March 7, 2015

The Benson Family Feud

Gavel BWAs I have previously discussed, Tom Benson, owner of two New Orleans sports teams, is battling challenges against his mental competence and ability to run his business. The challenges come from his daughter, Renee Benson, and two grandchildren. The dispute centers on deeply personal issues with each side stating a contrasting view of their motivations. Renee and her children expressed in their filings that their case was motivated by a desire to protect Benson from the manipulations of his current wife. While Benson has alluded that his daughter and grandchildren were unable to get along with his wife and were creating family strife. The legal battle does not only have deeply personal roots for the Benson family, but also for the teams' fans. The lawsuit is a frequent topic on sports radio and the talk-of-town.

See Ken Belson, A Messy Family Battle for New Orleans Teams, The New York Times, March 6, 2015.


March 7, 2015 in Current Affairs, Current Events, Disability Planning - Property Management, Elder Law, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, March 5, 2015

Financial Planning Risks for Professional Athletes

SportsMismanagement of the multi-million dollar salaries of professional athletes is unfortunately common, and a recent example is the case initiated by San Antonio Spurs center Tim Duncan against his financial advisor. The drastically quick wealth jump seen by professional athletes can result in a lack of knowlegde of financial management and full reliance on advisors, some of which are personal contacts that lack adequate knowledge in the area. Proper investing and advice is critical for professional athletes who have relatively short earning windows.

See, Parker Beauchamp, How Professional Athletes  Can Avoid Becoming Another Statistic, Wealth Management, March 2, 2015.

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

March 5, 2015 in Estate Planning - Generally, Professional Responsibility, Sports | Permalink | Comments (0) | TrackBack (0)

Friday, August 29, 2014

Article on How Creating Trusts for Student-Athletes Can Save the NCAA From Itself

Jonathan StromJonathan Strom (J.D./M.B.A. Candidate, Texas Tech University School of Law, May 2015) recently published a comment entitled, Putting Our Trust in the National Collegiate Athletic Association (NCAA): How Creating Trusts for Student-Athletes Can Save the NCAA From Itself, Estate Planning and Community Property Law Journal, Vol. 6 Bk. 2, Summer 2014. Provided below is an excerpt from the introduction of the comment:

“[A]mateurism is not a moral issue; [rather,] it is an economic camouflage for monopoly practice.” This is a harsh reality for the current state of college athletics. Finding the proper balance between maintaining amateurism status and compensating student-athletes is becoming a more controversial issue, with players like Johnny Manziel and Jadeveon Clowney brining in millions of dollars in revenue for their respective schools. Recent lawsuits have forces the National Collegiate Athletic Association (NCAA) to go into full defense mode, in hopes to maintain its current status quo.

This Comment addresses the recent issues facing the NCAA; specifically, it discusses the concern surrounding the O’Bannon lawsuit and its impact on player compensation. The O’Bannon lawsuit pertains to the use of student-athletes’ likeness in video games and massive television contracts for profit. Pulitzer Prize winner Taylor Branch ardently argues for compensating student-athletes. Branch asserts that student-athletes deserve compensation apart from college scholarships. Clearly, NCAA change is imminent whether it comes through restructuring or through the court system.

This comment presents a proposal for implementing trusts for student-athletes that will address the issue of compensation. The proposal for the creation of trusts for student-athletes allows the NCAA to address the issue of compensation and still maintain its core objectives. . . .

August 29, 2014 in Articles, Estate Planning - Generally, Non-Probate Assets, Sports, Trusts | Permalink | Comments (0) | TrackBack (0)

Sunday, May 11, 2014

Easements Score Big In Tax Court


Former owner of the Tampa Bay Buccaneers, Hugh Culverhouse Jr., now owns Parker Ranch Holdings, LLC (PRH).  In 2006, PRH claimed a charitable deduction of approximately $24 million for the donation of an easement on 82 acres of land to Sarasota County, Florida.  The land is presently being used for a public park, community garden, and conservation area. 

Although the IRS was willing to stipulate that the easement was worth something (a contrary position from other easement donation cases), it objected to the amount of the deduction.  Although the Tax Court did not allow the entire deduction, they allowed most of it--$19 million.  The court ruled that 20% accuracy-related penalty did not apply.

One of the reasons the court allowed this deduction is because conservation easements are rarely bought and sold.  Problems arise in valuing the property by establishing what the property could potentially be worth.  In some cases, the IRS has found that easements were worthless, since they did not significantly add to existing restrictions. 

The Tax Court’s decision might make people rethink their involvement in conservation easements.

See Peter Reilly, Former Tampa Bay Buccaneers Owner Scores Touchdown in Tax Court, Forbes, May 8, 2014. 

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

May 11, 2014 in Income Tax, Sports | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 7, 2014

Is Sterling's Life Worth Insuring?


On the face of it, Donald Sterling could be a very attractive life insurance candidate.  The 80-year-old Sterling’s net worth is $1.9 billion while the Los Angeles Clippers are worth around $430 million by itself.  The premium for his policy would probably be very high, leading to a huge case for a life insurance producer willing to take the risk. 

However, do his more reprehensible qualities pose too many underwriting challenges?  His many legal entanglements, involvement with prostitutes, and stress-induced maladies from a bitter marriage may just be too much.

See Steven Kobrin, Would You Sell Life Insurance to Donald Sterling?, Producers Web, May 2, 2014.

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

May 7, 2014 in Current Affairs, Non-Probate Assets, Sports | Permalink | Comments (1) | TrackBack (0)

Sunday, May 4, 2014

Sterling May Be Worth More Dead Than Alive

Donald sterling

The inheritance tax is likely to have a major impact on the estate of disgraced Clippers’ owner Donald Sterling.

If Sterling sells the Clippers for an estimated $1 billion, he will pay an estimated $350 in capital gains and state taxes.  Then upon his death, his estate would pay an inheritance tax of about $250 million on the remaining $650 million.  This would leave his estate and heirs a mere $400 million in after tax proceeds.

If the Clippers were sold after his death, the estate would pay only around $400 million in inheritance tax as the tax basis of the Clippers would be stepped up to market value.  The net proceeds to his estate would then be $600 million, $200 million more than if the Clippers were sold while he was alive.  However, there are many legitimate ways the estate could save on inheritance taxes by adjusting the value of the Clippers.

See Jack Humphreville, Donald Sterling: Worth More Dead Than Alive, City Watch, May 2, 2014. 

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

May 4, 2014 in Estate Administration, Estate Tax, Income Tax, Sports | Permalink | Comments (1) | TrackBack (0)

Tuesday, April 1, 2014

New Twist in Case of Lorenzen Wright Estate


The Tennessee Court of Appeals recently ruled that Shelby County Probate Court Judge Robert Benham overstepped his authority in the battle over murdered NBA star Lorenzen Wright’s estate.

Benham appointed a guardian to investigate lavish spending by ex-wife Sherra Wright.  Within ten months, Sherra Wright spent almost all of the $1 million in proceeds she received from an insurance policy on her husband’s life.  The appeals court vacated Benham’s judgment directing the guardian ad litem to take actions, ruling he “acted beyond the scope of (his) jurisdiction.”

See Marc Perrusquia, BRIEF: Local Judge Overstepped Authority in Lorenzen Wright Estate Case, Appeals Court Says, Insurance News Net, March 28, 2014.

April 1, 2014 in Current Affairs, New Cases, Sports | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 11, 2014

Article on Estate Planning for Athletes


Ashley Lucas (2014 J.D. Candidate, Texas Tech University School of Law) recently published an article entitled, The Game of Russian Roulette: A Practitioner’s Guide to Protecting Professional Athletes from “The Final Head Blow” During the Estate Planning Process, 6 Est. Plan. & Cmty. Prop. L.J. 131(Fall 2013).  Provided below is the introduction to her article:

It is certainly no secret that anytime an athlete sustains a blow to the head, it is dangerous.  Unfortunately, the win-at-all-cost mentality in today’s sports world, especially at the professional level, entices many players to ignore their injuries, either by playing through the pain or by playing hurt.  There is no denying that it may be of no consequence for players to be tough and shake off certain types of injuries.  However, as national headlines blare about head injuries in professional sports, and research continually indicates that recurring head injuries trigger the early onset of neurodegenerative disease, especially among collision-and contact-sport athletes, it is inescapably clear that the risks and long-term consequences associated with sports-related brain injuries demand our undivided attention.

Over the past few decades, sports have become increasingly popular in the United States; this rise in popularity has, in effect, exposed a sizeable portion of our population to the risk of brain injury.  According to the United States Centers for Disease Control and Prevention (CDC), there are approximately 300,000 sports-related traumatic brain injuries each year.  Other studies show that approximately 1.6 to 3.8 million athletes in the United States suffer a traumatic brain injury related to participation in sports activities.  In today’s sports, not only are athletes, at all levels, bigger and faster, but also, they are much stronger than they were in the past.  Because athletes can create more power and speed these days, they contact their opponents with a force, unlike ever before, and with harder hits comes more head trauma.  While full-blown concussions are certainly a cause for concern, they are just part of the issue.  Recent findings in concussion research indicate “that repetitive small hits to the head can cause as much damage as big blows . . . They all count.”

The prospect of long-term neurological decline among professional athletes is undoubtedly a cause for concern.  Such concern is worthy of estate planning professionals’ attention.  Estate planners must be cognizant of the fact that a growing number of professional athletes suffer from neurodegenerative diseases, and although the patterns of progression of the different diseases may vary among athletes, most neurodegenerative diseases progressively attack the central nervous system and cause long-term, life-altering consequences. 

The purpose of this article is to bring awareness to the long-term health implications associated with head injuries sustained by athletes who participate in different collision and contact sports.  Not only does this article aim to educate estate planning attorneys of the importance of planning for the unfortunate possibility of a client’s long-term neurological decline, but it also seeks to offer guidance to those working with professional athlete clients because until now, there has been an absence of direction in this area.  Part III of this article provides background information about various collision and contact sports and discusses various professional athletes who have suffered from the effects of traumatic brain injuries.  Next, Part IV provides information about various neurological studies of former professional athletes, each of which augments the evidence linking head injuries to the prospect of long-term neurological decline.  Part V extends the evidence to illustrate the impact that sports-related head injuries have on the estate planning community.  Finally, Part VI highlights the fact that current estate planning tools do not adequately address the potential issue that professional athletes face, and it provides questions that practitioners can incorporate into their estate planning strategies to better protect this class of individuals.

March 11, 2014 in Articles, Estate Planning - Generally, Sports | Permalink | Comments (0) | TrackBack (0)