Monthly Archive for August, 2007

The Leona Helmsley will: $12M trust for dog, nothing for 2 grandkids

Leona Helmsley’s dog will continue to live an opulent life, and then be buried alongside her in a mausoleum. But two of Helmsley’s grandchildren got nothing from the late luxury hotelier and real estate billionaire’s estate.

CNN wrote today about one of the more interesting details of the will of Leona Helmsley: the $12 million dollars left to her dog Trouble.

She further “ordered that cash from sales of the Helmsley’s residences and belongings, reported to be worth billions, be sold and that the money be given to the Leona M. and Harry B. Helmsley Charitable Trust.”

CNN mentioned only the will and that the money was left in a “trust fund” of some kind leaving me to wonder if it was a pet-trust or not.

  • Leona Helmsley leaves $12 million trust fund for her dog, Trouble
  • Nothing left to two of her four grandchildren, for “reasons … known to them”
  • When Trouble dies, she’ll be buried in Helmsley mausoleum
  • Helmsley died August 20; her will was made public Tuesday
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    What About Children Conceived After Death?

    In this post the Florida Probate Litigation Blog asks:

    “[W]hat legal rights – if any – does a child both born and conceived after the father’s death have?”

    Juan Links to an article entitled Posthumous Reproduction, by Prof. Charles P. Kindregan, Jr., of Suffolk University Law School in Boston, who describes the legal landscape this way:

    Until very recently, legal issues surrounding posthumous children focused on inheritance rights of a child who was conceived while the biological parents were alive with the child being born after the death of the father. The law largely deals with this problem by providing for the legal heirship of children born within the normal gestational period following the death of the father. But the development of such technologies as intrauterine insemination, in vitro fertilization, surrogacy, cryopreservation of gametes and embryos and (someday) human reproductive cloning have created the potential for an entirely different set of legal issues. These issues are not based on the birth of a child after the death of the father when the child is conceived prior to the father’s death. Instead, the new reality is based on conceiving a child or implanting a preexisting embryo after the death of a genetic parent or parents. This article explores some of the evolving issues created by the use of cryopreserved gametes and embryos after the death of one or both gamete providers.

    I am unaware if Ohio has a statute governing children conceived after the death of the father and would surmise that “In the absence of guiding legislation, courts are forced to fall back upon general rules of construction within the probate and trust context.”

    That appears to be what a court in New York recently did, as reported on in Sons Conceived In Vitro Ruled Covered by Trusts, when it ruled that two children conceived and born after the father’s death were nonetheless intended beneficiaries of the father’s trust. Fascinating Stuff!

    Three years after James B. died of Hodgkin’s lymphoma, his wife Nancy gave birth to the couple’s first son, who was named James in honor of his late father.

    Two years later — nearly six years after her husband’s death — Nancy gave birth to their second son, Warren.

    Now, as the boys approach their first and third birthdays, their in vitro conception has raised an issue of first impression that New York’s Legislature did not consider, for obvious reasons, when it first drafted the Estates, Powers and Trusts Law in the early 1960s.

    Specifically, in Matter of Martin B., Manhattan Surrogate Renee Roth had to decide whether the “issue” and “descendants” provided for in seven 1969 trusts includes children conceived with the cryopreserved semen of the grantor’s late son — James B., as he is known in court papers — whose death preceded his own sons’ conception.

    Surrogate Roth ruled that the grantor’s intent is controlling and that, although his trusts were understandably silent on the subject, they appeared to favor inclusion of young James and Warren among his “issue” and “descendants.”

    “[The] instruments provide that, upon the death of the Grantor’s wife, the trust fund would benefit his sons and their families equally,” Surrogate Roth wrote. “In view of such overall dispositive scheme, a sympathetic reading of these instruments warrants the conclusion that the Grantor intended all members of his bloodline to receive their share.”

    * * * * *

    [Surrogate Roth] noted that the New York Legislature has addressed the same issue vis-à-vis wills: A recent amendment to the Estates, Powers and Trusts Law excludes “post-conceived” children from sharing in a parent’s estate, absent a contrary provision.

    That amendment, however, is “applicable only to wills and to ‘after-borns’ who are the children of the testators themselves,” Surrogate Roth wrote. “Moreover, the concerns to winding up a decedent’s estate differ from those related to identifying whether a class disposition to a grantor’s issue includes a child conceived after the father’s death but before the disposition became effective.”

    Written By:Jeffrey S. Goethe On August 3, 2007 11:20 AM

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    Gift Tax Consequences of Trusts Employing Distribution Committee

    I’ve only seen a few times (but have never drafted a document) where a trust utilizes a distribution committee consisting of trust beneficiaries who direct distributions of trust income and corpus (under “sections 2511 and 2514 of the Internal Revenue Code of trusts”).

    The following is from IR-2007-127, July 9, 2007 (and The Wills, Trusts & Estates Prof Blog, 8/4/2007)

    Apparently the conclusions in the PLRs regarding the application of section 2514 “may not be consistent with Rev. Rul. 76-503, 1976-2 C.B. 275, and Rev. Rul. 77-158, 1977-1 C.B. 285. Accordingly, the Office of Chief Counsel is requesting comments as to whether the conclusions in these PLRs regarding section 2514 can be reconciled with the revenue rulings.”

    These PLRs involve a situation where trust distributions are made at the unanimous consent of a distribution committee that consists of trust beneficiaries, or at the discretion of an individual committee member with the consent of the grantor. If a distribution committee member resigns or dies, the committee member is replaced with another person. The PLRs conclude that the distribution committee members have substantial adverse interests to each other for purposes of section 2514. Therefore, they do not possess general powers of appointment over the trust. Accordingly, distributions from the trust will not be subject to gift tax with respect to the distribution committee members.

    However, the holdings in Rev. Rul. 76-503 and Rev. Rul. 77-158 indicate that because the committee members are replaced if they resign or die, they would be treated as possessing general powers of appointment over the trust corpus. It has been suggested that the facts presented in the PLRs are distinguishable from the revenue rulings because in the PLRs, the grantor’s gift to the trust is incomplete since the grantor retains a testamentary special power of appointment. See, however, section 25.2514-1(e), Example (1) of the Gift Tax Regulations, and Rev. Rul. 67-370, 1967-2 C.B. 324.

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    Rupert Murdoch and The Bancroft Trustees

    Yesterday the Florida Probate Litigation Blog posted a great link to a Wall Street Journal article about the Bancroft Family’s long-time trusts lawyers hold the key to Mr. Murdoch’s purchase of Dow Jones.

    From the article:

    The Bancroft family may own a controlling stake in Dow Jones & Co., but the final decision on whether to sell the publisher of The Wall Street Journal to Rupert Murdoch could well be made by a small circle of longtime family lawyers in downtown Boston.
    [Rupert Murdoch]

    Lawyers from Hemenway & Barnes sit at the center of dozens of overlapping trusts that hold power over most of the Bancrofts’ 64% voting stake in the company (see a breakdown). Those lawyers occupy two of the three trustee seats on a number of key trusts, with the third held by a family member. On one of the biggest trusts, lawyers from the firm are the only trustees. And the fact that the large Bancroft clan is divided over whether to sell further deepens the firm’s influence.

    “The vote really resides with them,” says one family member who is leaning in favor of selling the company.

    Its worth reading especially to see the chart that breaks down whose trust owns what share and what it means to each beneficiary. The FPLB also has some applicable advice for Grantors and Trustees

    Thanks Juan!

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    A Grass-Roots Effort to Grow Old at Home

    The New York Times today has an interesting piece about a group of home-owners in Washington State who are banding together as “part of a movement to make neighborhoods comfortable places to grow old, both for elderly men and women in need of help and for baby boomers anticipating the future.”

    Their group has registered as a nonprofit corporation, is setting membership dues, and is lining up providers of transportation, home repair, companionship, security and other services to meet their needs at home for as long as possible.

    Urban planners and senior housing experts say this movement, organized by residents rather than government agencies or social service providers, could make “aging in place” safe and affordable for a majority of elderly people. Almost 9 in 10 Americans over the age of 60, according to AARP polls, share the Allens’ wish to live out their lives in familiar surroundings.

    Many of these self-help communities are calling themselves villages, playing on the notion that it takes a village to raise a child and also support the aged in their decline. Some are expected to open this fall on Capitol Hill; in Cambridge, Mass.; New Canaan, Conn.; Palo Alto, Calif.; and Bronxville, N.Y.

    I sympathize with them and wish them all the luck in the world!

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    Iconic Philanthropist Brooke Astor Dies t 105

    I previously posted about the will of Mrs. Astor, its charitable bequests and the familial problems surrounding her care, and was sad to read yesterday on CNN about her death.

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