will Archives - Samuels Yoelin Kantor LLP

Carrie Fisher: Some Early Thoughts on Her Estate

March 8, 2021December 28, 2016 by Michael Walker

May the Force be with you Carrie – you were one of the brightest stars.

The entertainment world lost an iconic legend today. Carrie Fisher, best known for her role as Princess Leia Organa in the Star Wars films, passed away this morning after suffering a heart attack on December 23, 2016, while on a flight from London to Los Angeles. In addition to her Star Wars role, Ms. Fisher starred in many other films, and also authored several books, plays, and screen plays. She recently published her autobiography, The Princess Diarist.

From a legal perspective, it is far too early to analyze Ms. Fisher’s estate to any degree. However, one can make a number of observations:

Fisher was not married at the time of her death, but was survived by one child, her daughter, actress Billie Lourd, age 24. Ms. Lourd therefore would be Ms. Fisher’s sole natural heir.
Fisher was married for a short time to singer, Paul Simon. Ms. Lourd’s father is talent agent Bryan Lourd. However, Ms. Fisher and Mr. Lourd were never legally married. Therefore, neither Paul Simon nor Bryan Lourd would be an heir to Ms. Fisher’s estate, absent an express bequest in her will or trust.
Fisher was the child of two entertainers, the late Eddie Fisher and Debbie Reynolds. Eddie Fisher died in 2010, and was survived by four children, including Carrie Fisher. Presumably, Ms. Fisher was a partial heir to Eddie Fisher’s estate, although few details of that estate appear to be public. However, Ms. Reynolds is still living and will likely leave her estate to her surviving son and Ms. Lourd.
Fisher was a California resident, so her name and likeness will be protected by the California Celebrity Rights Act for another 70 years. However, her depiction of Princess Leia was apparently transferred by contract to Lucasfilm Ltd. when she starred in the first Star Wars film at the age of 19.
Along with her other principal Star Wars actors, Harrison Ford and Mark Hamill, Ms. Fisher agreed to take a percentage of the movie’s profits, plus a take of TV screenings, re-releases and more. Therefore, these residual profit rights will presumably be inherited by Billie Lourd.
Carrie Fisher was involved with a number of charitable causes during her lifetime. Her will or trust may therefore include bequests for charitable causes.
While Congress and the new administration are considering a repeal of the federal estate tax, any such legislation will likely be effective no earlier than January 1, 2017. Therefore, the portion of Ms. Fisher’s estate that exceeds the 2016 estate tax exemption amount of $5.45 million will be subject to a federal estate tax at the rate of 40%.

Because of their notoriety, the estates of well-known celebrities are often illustrative of many issues that many people face in their estate planning. Only time will tell if important lessons will emerge from the Estate of Carrie Fisher.

A Tale of Two Wills

March 8, 2021October 30, 2013 by Tony Dal Ponte

What do you get when you mix a reclusive heiress with a will disinheriting her closest relatives? Unfortunately, litigation.

The story of Huguette Clark, reclusive daughter of a copper magnate and former United States Senator, should serve as a cautionary tale for everyone; even those with an estate worth significantly less than her estimated $300 million.

As reported by the New York Times, Huguette executed two wills in 2005. The first left the bulk of her estate to her closest relatives. The second, executed just six weeks later, cut out her relatives entirely, leaving gifts instead to her goddaughter, doctor, accountant, lawyer, and a foundation for the arts (among others).

Executing such vastly different wills in such a short period of time left the door wide open to legal challenge. Each side now has to develop their own narrative for what happened, painting dueling images of the reclusive heiress: a resolute millionaire vs. a vulnerable invalid. Was she a stubborn, strong-willed individual that had been jaded by “minimal contacts” with her family? Or did doctors, nurses, lawyers, and accountants isolate and exploit a vulnerable 104 year old woman? The outcome of the case is uncertain. What is certain is that the “dirty laundry” of what was once one of America’s richest families will now play out in the public arena.

It didn’t have to be that way. Better planning could have significantly reduced the likelihood of claims for undue influence and/or diminished capacity.

The lesson? Consulting with litigation attorneys as part of the planning process can sometimes help prevent litigation.

Click here to read the full NYT article.

Times are a-changin’ … So should your documents.

March 8, 2021March 8, 2013 by Glen Goland

“The line it is drawn, the curse it is cast
The slow one now will later be fast
As the present now, will later be past
The order is rapidly fadin’
And the first one now will later be last,
For the times they are a-changin’.”

Bob Dylan wrote these lyrics to ‘the times they are a-changin’ in September of 1964, while probably examining the political and racial upheaval he saw around him. When I hear the song these days, however, I’m convinced that the last verse is actually about updating business and estate planning documents. Bear with me…

2013 has brought changes to the tax structure that impact all of us and our clients: higher income and capital gains rates, higher estate tax exemptions, expiration of the 2% payroll tax holiday, the extension of portability, and the long-term patch to the Alternative Minimum Tax, to name a few. In the tax world, the times they are almost always a’ changin’, so it makes sense to occasionally review your estate and business documents to make sure this important paperwork reflects these changes appropriately.

Many of our clients’ families are going through transitions. (“The present now will later be past, the order is rapidly fading”). The birth or death of a family member, marriage, divorce, graduation, retirement, changes in jobs, receipt of an inheritance, and similar events often prompt the question: Does this change need to be addressed in my estate planning documents or the organizational documents for my business? If you think the answer might be “yes”, you are probably right.

Many of our clients also come to us because their businesses are going through a transition where the order is changing, or is going to change in the near future. Drawing the proper lines around how the next generation will inherit and manage a business can be done in many different ways. Some arrangements provide a business owner’s heirs with equal shares in managing the business and splitting its profits (and risks), and some arrangements hire a property manager to take over the day-to-day operation while the constantly-fighting children inherit profit rights and nothing more. There are many agreements that fall in between these extremes. There is a lot of room to customize the plan to the business (and family) involved, depending on taxes, family dynamics, and other factors. Some of these transitions go really well and some go terribly wrong. The ones that go smoothly usually involve well thought out written plans, open lines of communication, and children that are on good terms.

I am often asked how often our clients should review their estate and business planning documents. The answer is: whenever the times are a-changin’.

I hope this post has not ruined Bob Dylan’s music for any of our readers.

You can watch Bob Dylan perform ‘The times they are a changin’ at the White House here:

http://www.youtube.com/watch?v=k2sYIIjS-cQ

It was Professor Plum, in the library, with the lead pipe.

March 8, 2021August 16, 2012 by Glen Goland

Many law school professors test their students by presenting long and complicated fact patterns which must be analyzed issue by issue. When the law student graduates, he or she must then pass a state-specific exam consisting of the same sort of questions. These essay questions are designed to cover a broad range of topics in each area. The fact patterns are long and occasionally outrageous. For example, in the criminal law section of my Massachusetts Bar Exam I had to write an essay about the following fact pattern:

Guy 1 hires Guy 2 to kill Guy 1’s Wife. Guy 1 pays Guy 2 with a bag of drugs. Guy 2 goes to Guy 1’s house to kill Wife. Guy 2 breaks the glass in the kitchen door, reaches through, turns the door handle, and lets himself in, only to find Guy 1 and Wife in their kitchen arguing violently. Wife realizes Guy 2 is there to kill her so she stabs herself (thereby killing her unborn child). Wife dies 366 days later. Examine the issues.

Needless to say, real life rarely introduces such issue-packed cases. The administration of the $60 million estate of American painter Thomas Kinkade is an exception to that rule, packing enough legal elements to satisfy any bar examiner. In addition to the handwritten wills that I discussed in an earlier post, Mr. Kinkade’s girlfriend Amy Pinto-Walsh has refused to move out of the home she shared with the decedent. As a result, the estate has been footing the bill for the mortgage each month and sending Pinto-Walsh bills for rent, upkeep and maintenance.

Additionally, Kinkade’s wife Nanette Kinkade has filed court documents contesting the handwritten wills and accusing Pinto-Walsh of taking advantage of Kinkade as he escalated his alcohol and drug use, became estranged from his wife and four daughters, and ultimately died of toxic levels of alcohol and valium. Mrs. Kinkade is accusing Pionto-Walsh of using her influence over Mr. Kinkade to get the artist to change his will on several occasions near the end of his life.

Finally, the Kinkades were residents of California, a community property state. One-half of Mr. Kinkade’s estate therefore belonged to Mrs. Kinkade at her husband’s death – since they were separated, but not divorced. The court battles are all being fought over control of the other half, which is estimated to be worth about $30 million.

Very few of us will ever make millions by selling our paintings, but our estates may run into the same issues Mr. Kinkade’s has: imperfectly executed or updated documents, substance abuse issues, fighting relatives and charges of improper influence over mom or dad. It is also likely that the states in which we live and die will play a significant part in the administration (and taxation!) of our final affairs.

Many problems can be avoided with proper planning. Sometimes the best answer is to appoint a neutral party to play referee or to manage assets, other times the answer is formally documenting your wishes in the appropriate manner. Whatever the issues, the planning starts with communicating concerns over potential problems to your attorneys and advisors.

Jeff Cheyne and I will be discussing some of the common errors in estate planning and administration at an upcoming seminar in our office. If you would like to join us from 7:30-9:00 am on Tuesday August 23, please rsvp by calling our office at (503) 226-2966 or by email at events@samuelslaw.com. We will be discussing a broad spectrum of issues – from well drafted wills that don’t control any assets, to dying with no will at all – and many topics in between. Light refreshments will be provided.

“Send lawyers, guns and money, they’d get me out of this…”

March 8, 2021April 18, 2012 by Glen Goland

The first cassette I ever owned was Michael Jackson’s ‘Thriller’, purchased in 1982. Ten years later, my mom bought the soundtrack to the movie “The Body Guard”, which featured Whitney Houston’s rendition of “I will always love you”. ‘Thriller’ has now sold over 65 million copies and ‘The Body Guard’ has sold over 40 million, making these two albums the number one and number four best selling albums of all time, respectively. Between the two of them, Whitney Houston and Michael Jackson sold well over 250 million records during their lifetimes.

Unfortunately, selling millions of albums is not the only thing Whitney and Michael had in common. Both stars died over the last three years, both had well-documented battles with substance abuse (that may have lead to their deaths), and both were deeply in debt when they died. Whitney Houston borrowed tens of millions of dollars against the sales of records she had not yet made and Michael Jackson owed millions to a long line of creditors, including promoters, banks, and the second son of the king of Bahrain, among others.

Substance abuse and personal debt issues come up regularly in the estate planning process. Where appropriate, many parents condition receipt of trust funds on the passing of drug tests or attending counseling. A properly drafted trust may also protect your assets from the creditors of one of your beneficiaries. If you have relatives who struggle with debt or substance abuse issues, you may want to consider a trust as part of your estate plan.

If you have personal loans, documenting them properly may save your family attorney fees. The federal and state estate tax returns include schedules of the assets and liabilities of the decedent. These schedules are essentially a snapshot of everything a person owned (and owed) when he or she died. Tracking the debts of a decedent is often one of the more challenging parts of compiling the estate tax schedules, because many personal debts are informally documented, if they are documented at all. If you have personal loans, you should discuss these loans with your estate planning attorney, as properly drafted loan documents, combined with accurate amortization schedules, can save your attorney time (and therefore save your family money) during the administration of your estate.

One more note – there are provisions of the tax code which penalize parties for loans made at below market interest rates. If you have a substantial loan – whether personal or business – you may want to discuss the loan terms with your attorney.

The estates of Michael Jackson and Whitney Houston have benefited from increased record sales following the stars’ deaths. A large part of the estate income from these sales will be going to the satisfaction of personal debts. Most estates do not have this sort of income to offset debts and the debts are instead paid from the residue of the estate. For this reason, debts (including your home mortgage) should be considered when planning the distribution of your assets under a will or trust.

Most families will (hopefully) never have to deal with the sort of substance abuse and debt problems that followed Michael Jackson and Whitney Houston through the later years of their lives. When the issues do arise, however, properly drafted documents may be the family’s best protection agaist creditors and predators who are looking to get access to the assets of the estate. The key, as always, is to communicate the specifics of your situation to an attorney who specializes in estate and business planning.

Your assets are what the record says they are.

March 8, 2021December 17, 2010 by Victoria Blachly

Retired National Football League coach Bill Parcells often assessed his teams’ performances by telling media members, “You are what your record says you are”. A recent decision from the Appeals Court of Oregon reminds us that the same premise holds true when assessing property transfers made pursuant to estate planning: most of the time, your property is what the record says it is. Recording your transactions properly is the best way to tell a court what your intentions are for the property being transferred.

In Connall v. Felton, the Appeals Court of Oregon was presented with a deed that was transferred from a mother to her step-son, while both were alive. The deed contained a phrase that the mother had copied directly from a friend’s deed, which read, “The true and actual consideration paid for this transfer is $-0-; estate planning”. The step-son argued that the deed transferred the entire property interest to him (and him alone) at the moment the deed was signed. The other children asked the court to force the step-son to transfer the property to the mother’s estate, so that it could be enjoyed by all of the transferee’s children equally in accordance with the terms of her will.

The court was asked whether to admit external evidence (conversations the transferee had with family members, the transferee’s Last Will) to show that the transfer was intended to merely as a tool to avoid probate, with the intent that the property be shared among all of the transferee’s children. The court ruled that this evidence was inadmissible because the will was signed years before the deed was recorded and the family conversations happened after the deed was recorded. Because none of the evidence presented was related to statements made at the time of the deed’s execution, the court held that the evidence could not be used in determining the mother’s intent at the time of the transfer.

The court pointed to the clear and unambiguous language of the deed and decided that the deed did transfer the asset and an estate planning benefit was derived from the transfer (the asset did avoid probate). Since there was no (admissible) evidence to show the mother intended anything other than to give the property to her step-son, the Appeals Court held in the step-son’s favor.

Remember, your property is what the record says it is. You should consult an attorney any time you are considering re-titling or transferring assets for estate planning purposes, as properly executed estate planning and transfer documents can properly spell out your intentions and help prevent expensive arguments about the transfer of your assets.

May the Force be with you Carrie – you were one of the brightest stars.

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