Mega Money

Did Bill Gates and Wife Sign Pre-Nup?

The tabloid secured a copy of the Gates’ divorce filings. The papers show that the couple signed a separation contract they told the court to enforce, rather than a prenuptial agreement.

Entrepreneur’s recent article entitled “Bill and Melinda Gates Never Signed a Prenup. Here’s How They’ll Divide Their Assets Instead” says that a prenuptial agreement is created before the parties get married and states what each party will retain, should a divorce occur.

By contrast, a separation contract includes a “postnuptial agreement” that’s signed when the two parties are thinking about divorce but are legally married. A separation contract can direct the division of property and address spousal support, but it can’t include any terms on child support and custody.

According to the divorce filings, the couple has agreed to divide real estate property, personal property, debts and liabilities, as “set forth in our separation contract.”

Spousal support “is not needed,” they wrote.

“This marriage is irretrievably broken,” Melinda wrote in her request for a divorce. “We ask the court to dissolve our marriage and find that our marital community ended on the date stated in our separation contract.”

The couple announced their divorce in a statement:

“After a great deal of thought and a lot of work on our relationship, we have made the decision to end our marriage,” the two said in a joint statement. “Over the last 27 years, we have raised three incredible children and built a foundation that works all over the world to enable all people to lead healthy, productive lives. We continue to share a belief in that mission and will continue our work together at the foundation, but we no longer believe we can grow together as a couple in this next phase of our lives. We ask for space and privacy for our family as we begin to navigate this new life.”

The couple first met at a work event in New York in 1987 and married seven years later on New Year’s Day in Hawaii.

They have three children together: Jennifer, Rory and Phoebe.

A court is expected to look at the Gates’ divorce filings this fall.

Perhaps it will all end amicably. They certainly have enough to divide. But having a pre-nup makes sense for a lot of couples, especially with blended families.  Reach out to the Nance Law Firm if we can help you decide.

Reference: Entrepreneur (May 4, 2021) “Bill and Melinda Gates Never Signed a Prenup. Here’s How They’ll Divide Their Assets Instead.”

 

Publicity escape

Why Is Billionaire Estee Lauder Heir Kicking Baby Mama Out of Mansion

New York socialite Taylor Stein is the mother of a love child with the Estee Lauder heir, William Lauder. They met at a party at Lauder’s Aspen Colorado mansion in 2000, when he was married to his wife Karen, who is the mother of two of his daughters.

Celebrity Net Worth’s recent article entitled “Estee Lauder Heir Embroiled In Legal Drama With Baby Mama” says that Lauder and Stein’s affair began a year later and in 2005, she got pregnant.

Lauder reportedly asked Stein to terminate the pregnancy because he was in the middle of a contentious divorce from Karen. Their marriage ultimately ended in 2009, but Stein got pregnant again in 2006 and their daughter was born in May 2007. Lauder moved Stein and his baby daughter to Aspen to keep his personal life out of the limelight.

Lauder is the grandson of Estee Lauder and is the executive chairman of Estee Lauder.

Taylor Stein is the daughter of the late Howard Stein, who was a New York City nightclub impresario behind 80s hot spots Au Bar and Xenon. Her grandfather Ruby Stein was a loan shark who was murdered. His headless body was found floating in Jamaica Bay in 1977.

Stein and Lauder have had a difficult relationship for years. In November 2012, Stein was arrested after she allegedly punched Lauder in the face during a fight they had on a street in Los Angeles. She pled guilty to a domestic assault charge and was sentenced to 19 days of community service.

Stein reportedly signed an agreement with Lauder in 2007 that would give her one million dollars every year provided she didn’t publicly disclose who the father of her child was and that she stayed at least 100 yards away from any member of the Lauder family in New York, Aspen and Palm Beach.

Their battle was recently reignited in late 2020, when their 13-year-old daughter put a post on social media saying her parents were divorced. Lauder saw this as a violation of the 2007 agreement. Stein is now accusing Lauder of backing out of their arrangement to support them. She also allegedly accused Lauder of a campaign of harassment against her, including hiring private detectives to watch her.

In 2018, she filed a complaint that Lauder was refusing to honor their agreement and was trying to evict her, their teenaged daughter and the 10-year-old son Stein adopted from their 6,000-square-foot, six-bedroom, five-bathroom home.

Stein and Lauder appeared to have reached a settlement in the fall of 2020, until the social media post irked Lauder and sent him fuming again.

Avoiding nasty court fights is just one objective of estate plan. Learn more in our free master class now.

Reference: Celebrity Net Worth (March 30, 2021) “Estee Lauder Heir Embroiled In Legal Drama With Baby Mama”

 

Estate Planning Lessons from Celebrity Nightmares

Another celebrity messes up his estate plan. The dispute over Larry King’s estate will shine a harsh spotlight on what happens when an elderly person makes major changes late in life to his or her estate plan, especially when the person has become physically weakened and possibly mentally affected, due to aging and illness. A recent article from The National Law Journal, “Larry King Will Contest—Key Takeaways,” examines lessons to be learned from the Larry King will contest.

A handwritten will is most likely to be probated. King’s handwritten will was witnessed by two individuals and may rise to the standards of California’s rules for probate. California was likely King’s residence at the time of his death. However, even if King’s won’t satisfy one section of California estate law referring to probate, it appears to satisfy another addressing requirements for a holographic will.

Holographic will requirements vary from state to state, but it is generally a will that is handwritten by the testator and may or may not need to be witnessed.

The battle over the will is just a starting point. Most of King’s assets were in funded revocable trusts and will be conveyed through the trusts. He did not seek to revoke or amend the trusts before he died. News reports claim that the probate estate to be conveyed by the will is only $2 million, compared to non-probate assets estimated at $50 million—$144 million, depending upon the source. Legal title is critical in estate planning: King may have thought he was changing his whole estate with his hand-written changes to his will. He should have had a qualified estate planning attorney change his trusts.

Passing assets through trusts has the advantage of keeping the assets out of probate and maintaining privacy for the family. The trust does not become a matter of public record and there is no inventory of assets to be filed with the court.

Any pre- or post-nuptial agreements will have an impact on how King’s assets will be distributed. This is an issue for anyone who marries as often as King did. Apparently, he did not have a prenuptial agreement with his 7th wife, Shawn Southwick King. They were married for 22 years and separated in 2019. While Larry had filed for divorce, the couple had not reached a financial settlement. California is a community property state, so Southwick will have a legal claim to 50% of the assets the couple acquired during their long marriage, regardless of the will.

It is yet unclear whether there was a post-nuptial agreement. There are reports that the couple separated in 2010 after tabloid reports of a relationship between King and Southwick’s sister, and that there was a post-nuptial agreement declaring all of King’s $144 million assets to be community property. Southwick filed for divorce in 2010, and King sought to have the post-nup nullified. They reconciled for a few years and King was reported to have updated his estate plan in 2015.

The claim of undue influence on the will may not be easy to sustain. Southwick is claiming that Larry King Jr., King’s oldest son, exerted undue influence on his father to change the will. They were not close for most of Larry Jr.’s life, but in the later years of his life, King made a transfer of $250,000 to his son. Southwick wishes to have those transfers set aside on the basis of undue influence. She claims that when King executed his handwritten will, he was highly susceptible to outside influences and had questionable mental capacity.

Expect this will contest to continue for a while, with the possibility that the probate court dispute extends to other litigation between King’s last wife and his oldest son.

Reference: The National Law Review (March 15, 2021) “Larry King Will Contest—Key Takeaways”

Why Is Family of a Texas Governor Fighting over His Estate?

Dolph Briscoe Jr. was an Uvalde, Texas rancher and businessman and was the 41st Governor of Texas between 1973 and 1979. His oldest child, Janey Briscoe Marmion, established the foundation with her father to honor her only child, Kate, who died in 2008 at the age of 20.  An expensive family feud is shaping up in Probate Court. Why are they fighting?  Money, of course.

(Former U.S. House Speaker and FDR’s vice president John Nance Garner — descended from the Virginia Nance’s — was also from Uvalde. Oh. And so is Matthew McConaughey, but I digress.)

The Uvalde Leader-News’ recent article entitled “Briscoe family lawsuit targets Marmion’s will” reports that Marmion’s original will filed in 2011 directed her assets to be placed in a revocable trust.

The foundation was to have received income from half of her wealth for 22 years. The rest was directed to the children of her brother Chip Briscoe and those of her sister Cele Carpenter of Dallas.

However, a second will executed by Marmion in 2014 and admitted to probate in the County Court in December 2018— a month and a day after her death—calls for three trusts, including two child’s trusts created by her father and a generation-skipping trust (GST). A GST is a type of trust agreement in which the contributed assets are transferred to the grantor’s grandchildren, “skipping” the next generation (the grantor’s children).

Marmion created the Janey Marmion Briscoe GST Trust, dated November 1, 2012, in which she gave a third of her assets to the foundation and the other two-thirds to be divided equally between Chip Briscoe’s sons.

Carpenter’s three children filed suit in Dallas and in Uvalde County last year challenging the validity of the 2014 will and contesting the probate.

Their complaint alleges that Marmion intended to include the three as beneficiaries, in addition to Chip’s two sons, and that the situation creates a disproportionate inheritance in favor of the Briscoe men.

The amount in question is more than $500 million, since the former Texas governor’s estate was estimated by Forbes to be worth as much as $1.3 billion in 2015. Governor Briscoe died in Uvalde in 2010 at the age of 87.

Reference: Uvalde (TX) Leader-News (March 11, 2021) “Briscoe family lawsuit targets Marmion’s will”

 

Signing estate plan documents

Producer Phil Spector Had an Estate. Did He Have an Estate Plan?

Music producer Phil Spector is regarded as one of the most influential producers of all time. He worked on iconic albums and songs of some of the biggest names in music history. Spector made his mark in the 1960s, producing more than 20 albums that scored on the Top 40 charts, according to Celebrity Net Worth.

Wealth Advisor’s recent article entitled “Phil Spector Net Worth: Music Producer Leaves Behind $50 Million Wealth.”

Spector produced or helped produce hits like “Unchained Melody,” the Ronettes’ “Be My Baby,” the Righteous Brothers’ “You’ve Lost That Lovin’ Feelin” and John Lennon’s “Imagine.” He worked with The Beatles, Beach Boys, Bruce Springsteen and many others. As a result, his net worth could actually be larger, if royalties and current inflation rates are taken into account.

Spector, a Bronx, New York native, won the 1973 Grammy for album of the year for his work on “The Concert for Bangladesh” and was inducted into the Rock and Roll Hall of Fame in 1989.

Prior to his career as a producer, he was in the band, The Teddy Bears. He then started his own record label.

However, for all his success, his reputation took a hit when he was convicted of second-degree murder in 2009 for the fatal shooting of actress and model Lana Clarkson. She was found dead of a gunshot wound in February 2003 in Spector’s mansion in Alhambra, California. Spector was sentenced to 19 years to life in prison and would have been eligible for parole in 2025.

Phil married Veronica “Ronnie” Bennett in 1968 and divorced in 1974. Spector again tied the knot with Rachelle Short in 2006. In 2019, they also divorced.

After his second divorce, Spector’s mansion was put on the market for $3.9 million. It was originally listed for $5.5 million, but buyers were not taken with a property where a murder took place. The property has nine bedrooms, two full kitchens and a view of the San Gabriel Valley.

Spector was being treated at a Northern California hospital for COVID-19 before he died, according to a report in the Los Angeles Times.

Reference: Wealth Advisor (Jan. 19, 2021) “Phil Spector Net Worth: Music Producer Leaves Behind $50 Million Wealth”

Time to Decide

It Is Important to have a Digital Estate Plan

Just as you organize your physical possessions and financial accounts, you need to organize and plan for your digital estate now. Otherwise, according to the recent article “Why You Need a Digital Estate Plan and How to Make One” from Next Avenue, you will leave a giant mess for your family.

Virginia enacted the Uniform Fiduciary Access to Digital Assets Act in 2017, allowing an executor or administrator of an estate, the trustee of a living trust, the guardian and conservator of an incapacitated person, and the agent under a power of attorney, to manage a person’s  digital assets, including computer files, web domains, and even virtual currency. Nearly all states have already passed similar laws to give a person’s family or their executor the right to access and manage some of their digital assets after they die. However, if the digital platform does not allow an executor or anyone to access and manage accounts, the problem will not be easily resolved.

Facebook has created a “Legacy Contact” and Google has an “Inactive Account Manager,” but they only work if you take the time to go through the process in advance. Sharing passwords and instructions or setting up an online password manager may or may not solve the problem for the 200 other accounts. Why?

Increasing security means that many accounts require confirmation codes, typically sent to a mobile phone or email address, before an account may be accessed. If the phone or email is locked, then access will be impossible. Two-factor authentication makes it harder for digital criminals to access your accounts, but it also makes it difficult for heirs and executors. Some people have taken a step into the future to have their accounts opened via facial recognition. How then do you access accounts?

Not all digital accounts and services have the same requirements for access.

Here is a way to think about your digital estate: what is the level of importance for each account? If it were deleted and all contents removed, how would it impact your life? Is it a “single sign on,” where credentials are needed to log into other accounts? Are there payment methods attached to the account, like automatic withdrawals or credit cards?

Many accounts may be dormant, like an old email address you stopped using ten years ago. However, what about the important accounts that are central to the business of your life, like checking and savings accounts, or personal email?

Tech giants like Google, Amazon, Microsoft, and Apple have made their way into many aspects of our lives. If you have a library of ebooks, or an online gaming presence with digital assets, would you wish to maintain those assets? Think about all the autopayment accounts that you have—and how much money your estate would lose if those accounts could not be shut down.

Once you have identified all of your important accounts, examine them one by one to see what if they have a legacy process. Then start thinking about what you would like to happen to the accounts and their contents, in case of your incapacity or death. Having a digital estate plan today is not futuristic at all—it’s how we live, and our estate plans should be updated accordingly.

Your estate planning attorney will know what your state’s laws are for digital assets, just as they do for more traditional assets.

Last word: do not include your usernames or passwords in your will. A will becomes a public document upon probate, and this information must be protected from identity thieves if the accounts are to remain secure.

Reference: Next Avenue (Jan. 1, 2021) “Why You Need a Digital Estate Plan and How to Make One”

 

What’s the Latest on the Zappos’ Founder’s Estate?

Judge Gloria Sturman granted the ex parte motion filed by the attorney representing Zappos’ Founder Tony’s Hsieh’s father Richard Hsieh and brother Andrew Hsieh to serve as co-special administrators and legal representatives for the estate of Hsieh, who seems to have died intestate (dying without a will).

Court filings show that the Zappos’ founder’s family wasn’t aware of a will or other estate planning documents to direct how to handle his financial assets after his death. Because he died without a will, no one can be absolutely sure what he intended.

KTNV’s recent article entitled “Judge awards Tony Hsieh’s father, brother administrative duties over massive wealth, estate,” reports that Tony Hsieh’s wealth could be as much as $1 billion with a variety of assets including real estate and other business dealings. As a result, figuring out Hsieh’s finances will be a time-consuming and complicated process.

The Hsieh family released a statement, part of which says that the hope to “carry on Tony’s legacy by spreading the tenets he lived by – finding joy through meaningful life experience, inspiring and helping others, and most of all, delivering happiness.”

Hsieh was described by some as eccentric, unconventional and wasn’t known for fitting into normal business customs. He lived in a 250 square-foot travel trailer in downtown Las Vegas and had a pet alpaca named Marley and pet chickens. The billionaire internet mogul, during a 2015 interview, remarked that he owned just four pairs of shoes—despite running a company that sold millions of pairs.

In August, Hsieh abruptly left Zappos, the company he oversaw for more than 20 years. Reports say he bought millions in real estate in Park City, Utah around that time, which was seen as peculiar, even for Hsieh, who said he believed more in “experiences” than owning physical items or property.

There were signs of substance abuse.

The fire that caused his death is under investigation in New London, CT. Fire authorities there say they were called to a home at 3:30 a.m. on November 18. Initial reports were that a person was barricaded inside a shed on the property. Dispatch audio says that Hsieh was locked inside, and firefighters found him unconscious.

Reference: KTNV (Dec. 3, 2020) “Judge awards Tony Hsieh’s father, brother administrative duties over massive wealth, estate”

 

How will President-Elect Biden Help Seniors with COVID-19?

Before you object, take note. This is not a political “post”.  Whenever there’s a change of Administration, it makes sense to look to the winning candidate’s platform and policy aspirations to predict how new leadership may impact things we care about. And I care about care for seniors. Home Healthcare News’s recent article entitled “‘Our Work Begins with Getting COVID Under Control’: What a Biden Administration Means for Home-Based Care” says that long-term care and protecting America’s senior population will need to be at the very center of President-Elect Biden’s response.

“Our work begins with getting COVID under control,” Biden said during his victory speech. “We cannot repair the economy, restore our vitality or relish life’s most precious moments — hugging a grandchild, birthdays, weddings, graduations, all the moments that matter most to us — until we get this virus under control.”

As the U.S. nears the mark of 18 million total coronavirus cases, the Biden administration’s response to the ongoing pandemic will need to be wide-ranging and thorough, impacting everything from vaccine development and distribution, to additional rounds of relief for health care providers.

“I will spare no effort — or commitment — to turn this pandemic around,” Biden continued.

The 78-year-old Biden has commented that he has a deep appreciation of home-based care. In July, he outlined a $775 billion plan to overhaul the nation’s caregiving infrastructure, which primarily consists of women and people of color. Biden said he wants to create upwards of three million new caregiving and education jobs over the 10 years and provide pathways for former caregivers to re-enter the workforce. That plan also called for a $450 million increase in funding for senior care. Some of those funds would be earmarked to improve wages and labor conditions for in-home care workers.

“Home health workers do God’s work, but aren’t paid much,” the then presidential candidate said on social media. “They have few benefits, and 40% are still on SNAP or Medicaid. It’s unacceptable. I’ll give caregivers and early childhood educators a much-needed raise.”

Biden has repeatedly brought attention to very specific, innovative programs that typically only industry insiders know about. This includes making specific references to CAPABLE, the program from the Johns Hopkins School of Nursing aimed at supporting aging in place, by coordinating nursing, therapy and handyman services in the home.

Biden and his Administration will likely try to get more resources for home-based care providers and other long-term care operators. In its official policy plan for nursing home regulations, for instance, the Biden team stated it would invoke the Defense Production Act to increase the overall supply of PPE. Right now, “protecting older Americans” is one of the main priorities featured on the Biden-Harris Transition website, which hasn’t been overlooked by those in aging services.

“Dealing with the coronavirus pandemic is one of the most important battles our administration will face, and I will be informed by science and by experts,” President-Elect Biden said recently.

Regardless of how you voted, I hope you’ll join me in wishing the new team success in that fight.

Reference: Home Healthcare News (Nov. 9, 2020) “‘Our Work Begins with Getting COVID Under Control’: What a Biden Administration Means for Home-Based Care”

estate planning

Scottish Actor Sean Connery May Have Had Dementia

The famous screen actor, Sean Connery, who was famous for portraying the original on-screen James Bond, passed away recently at his home in the Bahamas.

Yahoo News’s recent article entitled “Sean Connery widow reveals he had suffered from dementia” reported that Connery died peacefully in his sleep surrounded by family members, according to his widow Micheline Roquebrune.

“I was with him all the time and he just slipped away,” the 91-year-old told the London Daily Mail.

“He had dementia and it took its toll on him. He got his final wish to slip away without any fuss. It was no life for him. He was not able to express himself lately.”

Connery will be remembered at a private funeral ceremony, with a memorial event to be held later, according to a publicist. He was knighted in 2000 and won many awards during his decades-spanning career, including an Oscar, three Golden Globes and two Bafta awards.

However, it was his smooth, Scottish-accented portrayal of the suave licensed-to-kill spy 007 that earned him lasting worldwide fame and adoration. He was the first actor to say the unforgettable “Bond, James Bond.”

He made six official films as novelist Ian Fleming’s spy, giving what many still consider to be the definitive portrayal.

Former 007 actor Pierce Brosnan joined the flood of weekend tributes to the Scottish actor, who he said, “led the way for us all who followed in your iconic footsteps.”

“You were my greatest James Bond as a boy, and as a man who became James Bond himself, you cast a long shadow of cinematic splendor that will live on forever,” Brosnan added.

Connery was born in Edinburgh in 1930. He married French artist Roquebrune in 1974 after they met in Morocco in 1970.

They lived outside his native Britain for decades, previously owning a home in the Spanish resort of Marbella and then in the Bahamas.

“He was gorgeous, and we had a wonderful life together,” the Tunisian-born widow said. “He was a model of a man. It is going to be very hard without him. I know that. But it could not last forever and he went peacefully.”

Dementia can happen to anyone. For information on how families deal its onset and paying for care, visit www.nancelawfirm.net and our past blogs. Or call for a time to call and review matters.

Reference: Yahoo News (Nov. 1, 2020) “Sean Connery widow reveals he had suffered from dementia”

 

exemptions

Making the Most of Exemptions and Flexibility in Gifting

The time period available to take advantage of the high transfer tax exemption has driven many to make or give more serious thought to making large gifts, while the estate tax exemptions are certain. However, not everyone is ready or able to give away large amounts of wealth, in case they may be needed in the future. For those who are concerned about needing these assets vs. making gifts, there are some strategies that can build flexibility into gift planning, reports the article “Five Ways to Build Flexibility Into Your Gift Planning” from Financial Advisor Magazine.

Depending on the outcome of two runoff elections for the U.S. Senate in Georgia in early 2021, there may or may not be large changes in the gift and estate tax laws in store, but now, before any changes, may be a good time for people with larger estates to make significant gifts.

Spousal Lifetime Access Trust, or SLAT, is one gifting option for married couplies. This is a type of irrevocable trust that includes the grantor’s spouse as one of the beneficiaries. The couple can enjoy the gift tax exemption, because the trust is funded while one spouse is living, but they can also have access to the trust’s assets because the grantor’s spouse may receive both income and principal distributions. A few things to keep in mind when discussing this with your estate planning attorney:

  • If both spouses want to create a SLAT, be careful not to make the trusts identical to one another. If they are created at the same time, funded with the same amount of assets and contain the same terms, it is possible they will not withstand scrutiny.
  • The term “spouse” has some flexibility. The spouse could be the current spouse, the current spouse and a future spouse, or a future spouse for someone who is not yet married.

Special Power of Appointment is a power granted to a person to direct trust assets to a specified person or class of people (other than the power holder, the estate of the power holder or the creditors of either one). The power holder may direct distributions to one or more people, change the beneficiaries of the trust and/or change the terms of the trust, as long as the changes are consistent with the power of appointment. Note the following:

  • The permissible appointees of a power of appointment can be broad or narrow, and the grantor may even be a permissible appointee for outright distributions.
  • If the grantor is a permissible appointee, special care must be taken when naming the power holder(s) to avoid any challenge that the trust was always intended for the grantor. The trust may need to have multiple power holders, or a third party, to agree to any distributions.

A Trust Protector is a person who has powers over the trust but is not a trustee. This is an increasingly popular option, as the trust protector has the ability to address issues and solve problems that were not anticipated when the trust was created. The Trust Protector may often remove or replace trustees, make changes to beneficiaries, divide the trust, change administrative provisions, or change trust situs.

A Disclaimer is used when a gift recipient renounces part or all of a gift transferred to them. When a gift is made to a trust, the trust instrument is used to specify how the assets are to pass, in the event of a disclaimer. If the grantor makes a gift to the trust but is then concerned that the gift is unnecessary or the grantor might need the assets back, the trust can provide that the assets revert to the grantor in the event of the disclaimer.

Planning with Promissory Notes is another way to include flexibility in the timing, implementation and amount of gift planning. An asset is sold by the grantor to a grantor trust in exchange for a promissory note. There are no income tax consequences, as the sale is to a grantor trust. If the sale is for full market value, there is no gift. The grantor gets to decide when, and if, to make a gift with the promissory note.

Speak with your estate planning attorney to determine which, if any, of these strategies is the right fit for you and your family, and to learn more about flexible solutions to making large gifts. While it is impossible to know exactly when and how the federal exemptions will change, there are many different tools that can be used while waiting for any changes.

Reference: Financial Advisor Magazine (Sep. 10, 2020) “Five Ways to Build Flexibility Into Your Gift Planning”

 

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