Wills, Trusts & Estates Prof Blog

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

Wednesday, August 4, 2021

Michael Jackson estate valuers give rare inside look

MJExperts for the estate of Michael Jackson have offered a unique look at how the valuations were done for the "tax trial of the century." The case, Estate of Michael J. Jackson v. Commissioner, T.C. Memo 2021-48 was garnered massive media attention and was intently followed by valuation experts due to the "contentious issues" involved. 

The dispute concerned valuation of Jackson's name and likeness, his 50% interest in a music publishing company (operating business), and an entity that held a catalog of music. 

Experts joined together in a BVR Webinar panel that consisted of Jay E. Fishman (Financial Research Associates) and celebrity licensing expert Mark Roesler (CMG Worldwide). Fishman and Roesler worked together on valuing the name and likeness. The panel also included David Dunn, a music industry financial advisor for Shot Tower Capital. Dunn advised the valuation of the publishing entity and the music catalog. 

One point of contention in the case was the huge difference between the valuations of the estate and the IRS. If the government had prevailed, the estate would have paid an extra $500 million in taxes. 

The court sided with the estate on the name and likeness value as well as the value of the music publishing company, while the court sided with the IRS on the value of the music catalog. 

A recording of the webinar, Power Panel: Estate of Michael J. Jackson v. Commissioner, is available here. 

See Michael Jackson estate valuers give rare inside look, BVWire, August 4, 2021. 

Special thanks to Mark J. Bade (CPA, GCMA, St. Louis, Missouri) for bringing this article to my attention. 

August 4, 2021 in Estate Administration, Estate Planning - Generally, Estate Tax, New Cases | Permalink | Comments (0)

Tuesday, August 3, 2021

Billionaire Peter Thiel amasses $5bn tax-free nest egg in retirement account

Wealth taxBillionaire Peter Thiel, one of the founders of PayPal, "has used a retirement account designed to help ordinary Americans save for their golden years to amass a $5 [billion] tax-free nest egg. . ." 

Thiel, who is emphatically opposed to higher taxes, uses a Roth individual retirement account (IRA) to amass a tax-free fortune. In fact, many "ultra-rich Americans" have used the same strategy. 

In 2018 the average Roth IRA held $39,108. Roth IRAs, which were established in 1997 "to encourage middle-class Americans to save. . .for retirement," are tax free as long as they are not withdrawn before the account holder reaches 59.5 years. 

According to records obtained by ProPublica, Thiel placed 1.7 million shares of then-private PayPal into a Roth IRA in 1999, when annual contributions were capped at $2,000. 

In just one year, Thiel's Roth increased from $1,664 to $3.8 million. Thiel then used the proceeds from the Roth to make highly successful investments. 

Thiel is only one of many wealthy Americans to use a Roth in order stay safe from high taxes. 

See Dominic Rushe, Billionaire Peter Thiel amasses $5bn tax-free nest egg in retirement account, Yahoo Finance, June 24, 2021. 

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

August 3, 2021 in Estate Administration, Estate Planning - Generally, Estate Tax | Permalink | Comments (0)

Belmont University College of Law seeks Trusts and Estates professor

The below announcement is from the Faculty Lounge and recommended to me by Adam J. Hirsch (Professor of Law at the University of San Diego School of Law).

Belmont University College of Law, in Nashville, Tennessee, invites applications from entry level and experienced candidates to fill up to three tenure-track faculty positions to begin during the 2022-2023 academic year.  We are seeking candidates across a broad range of teaching and research areas.  Particular areas of interest include health law, civil procedure, property, trusts & estates, and legal research and writing (tenure-track). 

Successful applicants must have a J.D., strong academic background, and record that indicates the promise of both teaching excellence and high scholarly achievement.  Belmont is an EOE/AA employer and welcomes applications from candidates who may add to the diversity of the College of Law.  Belmont College of Law reserves the right to exercise a preference for those candidates who support the goals and missions of the University. 

If interested, please submit a letter of interest and curriculum vitae to the Chair of the Faculty Recruitment Committee, Professor Lucian Dervan, using the recruitment committee’s email address - lawfaculty.recruitment@belmont.edu.  If you have questions about the position or Belmont University, please contact Professor Dervan at Lucian.Dervan@Belmont.edu.

Belmont University is a private, Christian university focusing on academic excellence and is located in the heart of Nashville, one of the fastest growing and most culturally rich cities in the country.  Belmont is the second largest private university in Tennessee with nearly 8,500 students. Belmont students come from every state, more than 35 countries, and all faiths. The Belmont faculty is dedicated to teaching, service, and active engagement in scholarship.  The median LSAT/GPA for the 130 students who entered the law school in August 2020 were 156 and 3.60 (75th percentile: 159 and 3.80; 25th percentile: 153 and 3.36), placing the school well within the top 100 U.S. law schools for quality of enrollees.  Belmont’s ultimate bar passage rate for 2018 and 2019 was 100%, one of only a few law schools in the country to have achieved a perfect pass rate in those years.

August 3, 2021 in Faculty Positions -- Permanent | Permalink | Comments (0)

Monday, August 2, 2021

Succession Drama Grips Scholastic: CEO's Sudden Death, an Office Romance and a Surprise Will

LuccheseIn June, M. Richard Robinson Jr., the longtime lead of Scholastic Corp., died suddenly while on a walk in Martha's Vineyard. Robinson Jr.'s death was not the only surprise, as he also left behind a surprising succession plan. 

Instead of giving control of the publisher to his two sons, his siblings, or his ex-wife, control went to Iole Lucchese, Scholastic's chief strategy officer. Lucchese also inherited all of his personal possessions. 

In his 2018 will, Robinson described Ms. Lucchese as "my partner and closest friend." Lucchese has been with the company for 30-years. Ms. Lucchese and Mr. Robinson had been "longtime romantic partners, according to interviews with family members and former employees. 

The surprise heir has "set in motion a family succession drama at the century-old-company." The company, which is one of the world's largest publishers of children's books like the Harry Potter novels and Magic School Bus series, now has its future being called into question due to Lucchese's "sudden emergence as Scholastic's heir." 

Some family members have began to review their legal options—like reaching an agreement with Ms. Lucchese to transfer some voting shares to family members or to "ensure that get a greater share of the estate." 

Richard Robinson's youngest son, Maurice Robinson, stated that his father's decision to give control to Ms. Lucchese was "unexpected and shocking." John Benham Robinson, Richard Robinson's eldest son, described his father's estate plans as "salt in an open wound." 

See Jeffrey A. Trachtenberg & Shalini Ramachandran, Succession Drama Grips Scholastic: CEO's Sudden Death, an Office Romance and a Surprise Will , The Wall Street Journal, August 1, 2021.

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

August 2, 2021 in Books, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0)

Sunday, August 1, 2021

New, environmentally friendly option for final resting place in Flagstaff

DeathcertificateArizona now has its first Conservation Memorial Forest, a place where people's ashes can be spread in nature. The "Better Place Forests," located in Flagstaff said "that their mission is to give people a meaningful legacy with they end-of-life arrangements all while conserving natural areas for future generations." 

Sandy Gibson, the CEO of Better Place Forests said, "Better Place Forests is a sustainable alternative to traditional cemeteries, where instead of a grave and a tombstone, and buying a body, a family is choosing a tree and that tree is private to that family and that is where they spread the ashes of their loved ones. And buying that tree, they're helping to create a permanently protected conservative area." 

See New, environmentally friendly option for final resting place in Flagstaff, KVOA News: Tucson, June 16, 2021. 


August 1, 2021 in Death Event Planning, Estate Planning - Generally | Permalink | Comments (0)

Saturday, July 31, 2021

Illinois: Electronic Wills and Remote Witnesses Act

Estate planningThe governor of Illinois has signed into law the "Electronic Wills and Remote Witnesses Act," making it the tenth American state to put into effect legislation for e-wills. The act takes effect immediately (July 26, 2021).  The Illinois act is non-uniform -- it is not based on the Uniform Electronic Wills Act of 2019.

Below is the link to the Act:

Public Act 0167 102nd General Assembly 

Special thanks to Adam J. Hirsch (Professor of Law at the University of San Diego School of Law) for bringing this Act to my attention.

July 31, 2021 in Estate Administration, Estate Planning - Generally, New Legislation | Permalink | Comments (0)

Friday, July 30, 2021

Article: Decisions at the End of Life

David Orentlicher and Judit Sandor recently published an article entitled, Decisions at the End of Life, Wills, Trusts, & Estates Law ejournal (2021). Provided below is the abstract to the Article: Estate planning

Advances in medical technology have increased the ethical and legal dilemmas at the end of life. It is difficult to know the “good death “or what constitutes a dignified ending of life. Nor is the proper role of the law in regulating end-of-life medical care clear. To what extent should these matters be worked out between physicians and patients (or families), and to what extent should legal rules guide practice? And who should determine the rules—legislators issuing laws of broad application, or judges developing nuanced standards on a case-by-case basis?

In this chapter we explore the similarities and the major differences between U.S. and European legal thinking and jurisprudence. Of course, on a number of issues, there is no single U.S. or European approach. Accordingly, while we will give special attention to the jurisprudence of the U.S. Supreme Court and the European Court of Human Rights, we also will consider the significant variations among different U.S. states and different European countries.

July 30, 2021 in Articles, Death Event Planning, Estate Administration, Estate Planning - Generally | Permalink | Comments (0)

Thursday, July 29, 2021

Impact of President Biden's Tax Plan on Estate Planning

Estate planningThere has been speculation on what President Biden's tax proposal will look like and what effects it will have on estate planning. There is also a question about the likelihood that President Biden's tax plan will be enacted into law. 

The Biden Administration announced the American Families Plan in April 2021, which proposed "significant tax law changes to increase taxes on both corporations and high-net worth individuals and to provide more resources to enhance IRS tax enforcement efforts. 

In May 2021, the United States Department of Treasury issued a report entitled, "General Explanation of the Administration's Fiscal 2022 Revenue Proposals (generally referred to as the Green Book) which included more details on the tax law changes previously proposed in the American Families Plan." The memo provided an overview of the proposed changes of the American Families Plan and the impact those changes may have on estate planning. 

Under the current proposal, "there will be a realization of capital gains to the extent such gains are in excess of a $1 million exclusion per person, upon the transfer of appreciated assets at death or by a gift. . .the proposal would provide various exclusions and exceptions for certain family-owned and operated businesses. 

One thing that was not addressed in the Green Book are changes to the federal estate, gift and generation skipping transfer (GST) tax system, although Biden did propose these changes during his campaign. 

There is a lot of uncertainty surrounding new tax laws, so high-net-worth individuals with estate tax concerns should consider taking advantage heightened exemptions by implementing wealth transfer strategies like the following: 

  • Intentionally Defective Grantor Trust (IDGT)
  • Spousal Lifetime Access Trust (SLAT)
  • Grantor Retained Annuity Trust (GRAT)
  • Charitable Lead Annuity Trust (CLAT)
  • Annual Gifts 
  • And more. 

See Jeffrey M. Glogower, Stephen J. Bahr, & Adam W. Randle, Impact of President Biden's Tax Plan on Estate Planning, The National Law Review, July 26, 2021. 

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

July 29, 2021 in Estate Administration, Estate Planning - Generally, Estate Tax, Generation-Skipping Transfer Tax, Gift Tax, Income Tax | Permalink | Comments (0)

Wednesday, July 28, 2021

Britney Spears' new lawyer files to remove father's control

SpearsBritney Spears' new attorney, Mathew Rosengart, petitioned to remove her father from the conservatorship that has "controlled her life and money for 13 years and replace him with a professional accountant." 

In documents filed in Los Angeles Superior Court, Rosengart said that the current legal arrangement "has grown increasingly toxic and is simply no longer tenable." Rosengart proposed that Jamie Spears be replaced with CPA Jason Rubin as conservator of Spears' estate. Documents state that Spears' estate includes $2.7 million in cash and more than $57 million in assets. 

Rosengart stated that he first priority is removing Jamie Spears as conservator of the estate, which he stays is "the most pressing issue facing Ms. Spears." 

Rosengart added, "[a]ny father who genuinely loves his daughter and has her best interests at heart should willingly step aside in favor of the highly respected professional fiduciary nominated here.”

Lynne Spears, Britney's mother and Jamie's ex-wife said that Jamie's "microscopic control" over her health care and business decisions was especially damaging. 

Since Judge Brenda Penny granted Britney Spears permission to hire an attorney of her choice, the ball has begun rolling, and it appears Britney Spears may have more hope at ending the conservatorship. 

See Andrew Dalton, Britney Spears' new lawyer files to remove father's control, ABC News, July 26, 2021. 

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.  

July 28, 2021 in Estate Administration, Estate Planning - Generally, Guardianship, Music | Permalink | Comments (0)

Tuesday, July 27, 2021

Family of James Brown settles 15-year battle over his estate

James BrownEntertainer James Brown's family has reached a settlement that will end a 15-year battle over the late singer's estate. David Black, an attorney representing Brown's estate, confirmed to the Associate Press, "that the agreement was reached July 9. 

The legal battle had been going on since his death at the age of 73 on Christmas Day 2006. James Brown's death led to a slew of "bizarre headlines, beginning with Tomi Rae Hynie—a former partner who claimed to be Brown's wife—being locked out of his 60-acre (24-hectare) estate while photographers captured her sobbing and shaking its iron gates, begging to be let in." 

There were over a dozen lawsuits filed by people attempting to get their hands on Brown's assets, which have been estimated to be worth anything from $5 million to more than $100 million. 

Brown was renowned for hundreds of iconic musical works including hits like “I Feel Good” and “A Man’s World,” and was known around the world for his flashy performances and dynamic stage presence. But years of drug problems and financial mismanagement caused his estate to dwindle.

The war over Brown's estate did not just include his assets, there was also a fight over what to do with his body. Brown's family fought over his remains for more than two months, "leaving Brown's body, still inside a gold casket, sitting in cold storage in a funeral home." 

Last year, the South Carolina Supreme Court ruled that Hynie had not been legally married to Brown and did not have a right to his estate. 

Justice also ordered a circuit court to "promptly proceed with the probate of Brown's estate in accordance with his estate plan, which outlined creation of a trust that would use his music royalties to fund educational expenses for children in South Carolina and Georgia." 

According to AP News: 

A 2009 settlement plan would have given nearly half of Brown’s estate to a charitable trust, a quarter to Hynie, and the rest to be split among his adult children. The state Supreme Court overturned that deal in 2013, writing that then-Attorney General Henry McMaster — now the state’s governor — hadn’t followed Brown’s expressed wishes for most of his money to go to charity, having instead selected a professional manager who took control of Brown’s assets from the estate’s trustees to settle debts.

See Meg Kinnard, Family of James Brown settles 15-year battle over his estate, AP News, July 23, 2021. 

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.  

July 27, 2021 in Estate Administration, Estate Planning - Generally, Music, New Cases | Permalink | Comments (0)