Wills, Trusts & Estates Prof Blog

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

Saturday, March 21, 2020

Vanessa Bryant Files to Add Infant Daughter to Kobe's Trust

KobesuitKobe Bryant had set up a trust before his untimely death to provide for his widow, Vanessa, and their daughters, one of which perished alongside him in a helicopter crash in January. The trust was created in 2003 and amended several times, the last in 2017. The couple's most recent child, Capri, was born in 2019. Vanessa has filed to amend the problem, requesting that the infant daughter be added to the trust.

The trust agreement is reportedly set up to allow Vanessa and her daughters to draw from the principal and income during Vanessa’s lifetime, with the remainder going to the children upon Vanessa’s death. The widow is arguing that according to the trust document, Kobe's intent was to provide for all their children. The other two surviving children of the couple are Natalia, 16, and Bianka, 2.

Vanessa has also filed a lawsuit against the helicopter company that owned the vehicle in which her husband and daughter died and has demanded the deletion of reported graphic photos taken and distributed by deputies through her lawyer.

See Jack Baer, Report: Vanessa Bryant Files to Add Infant Daughter to Kobe's Trust, Yahoo Sports, March 19, 2020; see also Ralph R. Ortega, Kobe Bryant's Widow Seeks to Amend His Trust to Include Daughter Capri, Daily Mail, March 18, 2020.

Special thanks to Jim Hartnett, Jr. (Dallas, Texas Probate Attorney) and Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing these articles to my attention.

March 21, 2020 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Sports, Trusts | Permalink | Comments (1)

Monday, January 27, 2020

Kobe Bryant Leaves Behind a Business Empire that Stretched Beyond the Basketball Court

KobesuitThe sudden death of basketball star Kobe Bryant sent shockwaves not only through the realm of sports, but through the world. Bryant, 41, was killed yesterday when the helicopter he was on crashed near Calabasas, California, along with his 13-year-old daughter, Gianna, and seven other individuals. But the man was more than a basketball player as he was showcasing his business mind with investments and other ventures.

In 2013, before he retired from the NBA, Bryant co-founded venture capital firm Bryant Stibel along with Web.com founder Jeff Stibel. The firm now has more than $2 billion in assets, with investments in dozens of technology, media and data companies, including Fortnite creator Epic Games, digital payment company Klarna and household products firm The Honest Company. Outside of Bryant Stibel, he had seen a return of millions of dollars with his investment in the sports drink Body Armor, which sold a stake to Coca Cola in 2018.

In 2016, Bryant founded Granity Studios, a media company that focuses on creative storytelling around sports. He wrote and narrated the short story Dear Basketball through the company, winning the Academy Award for best animated short film in 2018, and also released a series of books for young adults.

Bryant, along with LeBron James and Carmelo Anthony, signed a deal with Nike in 2003 when Michael Jordan retired. Nike put out multiple lines of Kobe shoes and gear. In 2017, the company brought Bryant on stage with then-CEO Mark Parker at its annual investor meeting to celebrate the launch of Nike's new business strategy. Bryant then began to grow his own brand, "Black Mamba," which was his nickname on the court. In a partnership with Nike, Bryant launched the "Mamba League" in 2017, a youth basketball league that allows hundreds of kids free access to the sport. 

See Clare Duffy and Alexis Benveniste, Kobe Bryant Leaves Behind a Business Empire that Stretched Beyond the Basketball Court, CNN, January 26, 2020.

January 27, 2020 in Current Events, Estate Planning - Generally, Sports | Permalink | Comments (0)

Tuesday, November 12, 2019

Season Ticket Transfers and Estate Planning: Football [Michigan]

FootballWhen putting together a will, often times people diligently lay out a laundry list of specific requests that have immense sentimental value. The gifts could involve cars, jewelry passed down through the family, or pieces of art. But for those that share a special pastime of watching sports with a child or other beneficiary, the ability to pass on season tickets might be one of the most memorable and meaningful component of an estate plan. Depending on the sports program, this ability could be attainable.

  • Detroit Lions
    • Season tickets can be transferred with prior approval of the ticket office, but partial transfers or subdividing accounts are generally not approved.
  • Michigan Wolverines
    • Officially, only a surviving spouse can be transferred season tickets, but the office may be willing to work with other family members. Since 2015, tickets can be transferred while alive during the month of December, with a nonrefundable transfer fee. Parking and priority points (used for bowl and away games) are not transferrable.
  • Michigan State Spartans
    • During life or at death, season tickets can only be transferred to the ticket holder's spouse, unless the holder has acquired special permission.

For other states' professional and collegiate teams, be sure to inquire about their season ticket policies.

See Rebecca K. Wrock, Season Ticket Transfers and Estate Planning: Football, Varnum Law, November 11, 2019.

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

November 12, 2019 in Current Affairs, Estate Planning - Generally, Sports, Wills | Permalink | Comments (0)

Sunday, September 15, 2019

Two of Pat Bowlen’s Daughters Take Legal Action to Challenge Ownership Trust

BroncosThe 2009 trust created by Pat Bowlen to ensure a succession plan for the ownership of his professional football franchise, the Denver Broncos, is now being attacked in court. Two of his daughters, Beth Bowlen Wallace and Amie Klemmer, are claiming the validity of the Patrick D. Bowlen Trust on the grounds that their father lacked the capacity to form the trust and that he was under undue influence at the time of its creation.

Essentially, the trustees choose one of Bowlen's 7 children to control and run the team. It is widely believed that 29-year-old Brittany Bowlen unofficially has been selected by the trustees, and that it’s just a matter of time before the selection occurs. Previously, the court had dismissed an action by Bowlen's brother brother - acting on behalf of Wallace and Klemmer - that questioned the authority of the three trustees who have managed the team since 2013.

Wallace and Klemmer claim that their father was first diagnosed with Alzheimer's in 2006, three years before the creation of the trust, and that he no longer had the capacity to do so. The stakes are high for the daughters, though; they could end up being completely disinherited by fighting the trust. So they are putting their portions of their father's estate on the line in order to challenge the current structure for determining control of the Broncos.

See Mike Florio, Two of Pat Bowlen’s Daughters Take Legal Action to Challenge Ownership Trust, Pro Football Talk-NBC Sports, September 13, 2019.

Special thanks to Jim Hartnett, Jr. (Dallas, Texas Probate Attorney) for bringing this article to my attention.

September 15, 2019 in Current Events, Estate Administration, Estate Planning - Generally, New Cases, Sports, Trusts, Wills | Permalink | Comments (0)

Friday, April 26, 2019

Article on Winning Starts at the Top: Estate Planning Considerations for the Modern Day Sports Team Owner

TexasDuncan Ternus recently published an Article entitled, Winning Starts at the Top: Estate Planning Considerations for the Modern Day Sports Team Owner, Wills, Trusts, & Estates Law eJournal (2019). Provided below is an abstract of the Article.

Professional sports team owners need to carefully plan their estates in order to win on and off the field. These individuals are arguably the most important figures in a professional sports team because their actions affect everyone associated with the team, from players to fans. Team owners represent some of the wealthiest people in America and have large estates that often include other business ventures besides their sports teams. When team owners take inadequate estate planning steps, their estates are often forced to sell their teams in order to pay estate taxes. This in turn can lead to team instability or, worst case scenario from a fan’s perspective, a forced relocation of the team.

This comment examines some of the ways today’s professional sports team owners can plan their estates in order to not only continue their personal success but their team’s success as well. Federal estate taxes are the largest hurdle for team owners because the tax affects only the wealthiest of estates, and planning one’s estate to avoid these estate taxes is vital for a team owners’ success. The future of the federal estate tax remains to be seen under the Trump administration, which could lead to substantial gain for team owners should the tax be repealed altogether. Team owners also need to consider state estate taxes for the states in which they are domiciled.

Over the past few years, notable professional sports team owners’ estates have experienced varying degrees of success. This comment will examine in detail the estates of Tom Benson and the New Orleans Saints and Pelicans, Ralph Wilson and the Buffalo Bills, William Davidson and the Detroit Pistons, and Jerry Buss and the Los Angeles Lakers. This comment also provides many strategies for sports team owners to limit their estate taxes, such as use of gift giving, charitable donations, family limited partnerships, and irrevocable life insurance trusts. A family business plan can also ensure a stable transition of ownership when the owner dies and passes the team to the family.

April 26, 2019 in Articles, Current Affairs, Estate Planning - Generally, Sports, Trusts, Wills | Permalink | Comments (0)

Wednesday, April 24, 2019

How Pro Athletes Can End Up Losing Their Wealth

MiketysonThe news is littered with professional sports stars earning millions and millions of dollars on contracts and endorsements and then for everything to come crushing back down on them. Once their personal fortunes are exhausted it is nearly impossible to recuperate what they once had, or even to be back on sturdy ground.

The reasons these superstars' wealth goes up in smoke can be devolved into three reasons: overspending, unsound financial advice, and a mixture of both. Overspending is not usually the sole reason that these athletes lose so much money, but it is definitely an attributing factor. Bad or deceptive financial advice can easily be determined to be the overwhelming reason why the fortunes are lost, and sometimes the flimsy advice is unintentional. But as Evan Jehle, partner in FFO Business Management & Family Office explains, “There are also quite a few professionals who exploit the naiveté and unsophistication of successful athletes. In these scenarios, the advice that has been given was done to benefit the advisor rather than the athlete.” Astronomically high life insurance policies with premiums that provide substantial commissions to advisors is one example.

Unbridled expenditures in combination with unsound financial advice can eat away at a professional athlete's fortunes, and in many cases, completely eradicate them.

See Russ Alan Prince, Russ Prince: How Pro Athletes Can End Up Losing Their Wealth, Financial Advisor, April 10, 2019.

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

April 24, 2019 in Current Events, Estate Planning - Generally, Malpractice, Professional Responsibility, Sports | Permalink | Comments (0)

Saturday, February 16, 2019

Rare Alfa Romeo Stuck in Basement for 35 Years Sold for $650,000 After Owner's Death

AlfaA rare beauty was found in a basement in Turin, Italy of a mechanic after the owner passed away in November. The mechanic appears to have lowered a rare 1962 Alfa Romeo Giulietta SZ down to the basement with an elevator, and then when the elevated broke, never repaired it. Fewer than 200 of that model are believed to have been made.

The mechanic died with no will and no heirs, so the government was able to claim the rare car. Worked removed the car with a crane and promptly sold it at a nondescript auction house for an incredible $650,000. That’s one of the highest prices ever paid for the model, and above the Hagerty Price Guide estimate for a show-quality example - all of which goes straight to the Italian Treasury.

See Gary Gastelu, Rare Alfa Romeo Stuck in Basement for 35 Years Sold for $650,000 After Owner's Death, Fox News, February 7, 2019.

February 16, 2019 in Current Events, Estate Planning - Generally, Sports, Travel | Permalink | Comments (0)

Thursday, January 24, 2019

Juventus' Cristiano Ronaldo Fined for Tax Fraud, Avoids Jail Term

RonaldoCristiano Ronaldo, a former forward for Real Madrid who recently transferred to Juventus, will avoid serving a 23-month prison sentence for tax fraud.  He accepted a suspended sentence but he was also fined €18.8 million ($21.6 million) to settle the case. 

Ronaldo requested for a special security measures to avoid the hassle of the press and the public but was denied. He was required to enter the court room through the main entrance for his appearance, which only lasted 15 minutes because it consisted of merely signing previously agreed upon settlement.

Ronaldo denied an accusation in 2017 that he knowingly used a business structure to hide income generated by his image rights in Spain between 2011 and 2014. He testified at the initial trial, saying he had performed no wrongdoing. He also told the judge he felt victimized by the Spanish authorities, which partially prompted the trade to Juventus.

Ronaldo earns an estimated $93m (€80m) a year, according to Forbes, with approximately half coming from image-rights deals with his many sponsors.

See Juventus' Cristiano Ronaldo Fined for Tax Fraud, Avoids Jail Term, ESPN, January 22, 2019.

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

January 24, 2019 in Estate Planning - Generally, New Cases, Sports, Travel | Permalink | Comments (0)

Friday, January 11, 2019

George Steinbrenner’s Estate Gets a Big Tax Break

YankeesOn October 9, 2018, Manhattan Surrogate Court Judge Rita M. Mella ruled that a QTIP (qualified terminable interest property) marital trust does not fall under New York estate taxation if the surviving spouse was pre-deceased by a spouse who died in 2010. The New York State Department had 30 days after being served with the judgement and notice of settlement, and according to court records the Department decided not to appeal.

The ruling will have broad implications, especially for larger estates such as that of George Steinbrenner, long-time principal owner of the New York Yankees. His will set aside an undisclosed portion of his $1.1 billion fortune into a QTIP trust for his widow, Joan, who died in December of 2018. It was tasked to Steinbrenner's attorney, Robert Banker, to determine when the trust would pay the estate tax, or to wait until Joan's passing. Based on the court ruling, it looks like Joan Steinbrenner's estate won't pay a QTIP tax at all.

A big question is on what legal grounds the New York State Department of Taxation and Finance could appeal the decision, if it chose to do so. “They could appeal … on the ground that the surrogate did not apply the law correctly to the facts of this case, [but] the facts were undisputed,” the law firm that represented the estate that the opinion was in reference to.

See Joyce Blay, George Steinbrenner’s Estate Gets a Big Tax Break, Financial Advisor, December 26, 2018.

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

January 11, 2019 in Current Affairs, Current Events, Estate Administration, Estate Planning - Generally, Estate Tax, New Cases, Sports, Trusts | Permalink | Comments (0)

Monday, November 26, 2018

Planning for a Hobby that Costs Almost as Much as Children

HorsesThere is an estimated 2 million horse owners in America, and millions more are affiliated in the equestrian industry as employees, volunteers, and service providers. These clients have a special set of financial needs. The hobby may be expensive, but any horse lover will tell you that it is worth it and there is no going back.

How to build a plan for a horse enthusiast without scrimping on the client’s own long-term care, retirement, family and other needs? One must consider the expenses of riding lessons, purchasing a horse, boarding, vet bills, farrier bills, dentist bills and show costs, among many others. Clients can spend between $6,000 and $25,000 per year, per horse depending on depending on circumstances. “Horses can live 30 years, and depending on the kind of owner, they could be making a longer financial commitment than to a child," says California-based advisor Brooke Salvini of Salvini Financial, who is also an equestrian.

Like children, horse take a considerable amount of time and expense. They require regular dental check-up, medical appointments, and re-shoeing for developing hooves - the horses, not the children. “Some [clients] can easily afford the activities, while others need to prioritize and plan to be able to meet their retirement goals," says California-based Wells Fargo advisor Sandra McPeak.

Avid horse owners also need to be aware of changes in the tax code that could effect their expenses year-to-year as well as the transfer of their precious animals at the end of their life. For the first time ever, an owner’s qualified business income from a pass-through is allowed a 20% deduction. Additionally, the modified estate tax will reduce the number of family businesses that are susceptible to it.

See Amanda Schiavo, Planning for a Hobby that Costs Almost as Much as Children, Financial Planning, September 11, 2018.

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

November 26, 2018 in Current Affairs, Estate Planning - Generally, Estate Tax, Income Tax, New Legislation, Sports, Wills | Permalink | Comments (0)