The Year In Review, 2007

The Thrill Ride That Wasn't

Reprinted from The Estate Analyst, December 2007

By Robert L. Moshman, Esq.

o rapidly did time fly by in 2007 that one might assume we were all having a great deal of fun. Yet for estate and financial planners, 2007 was status quo from start to finish. It would appear the warp engines of major change were off line and we were adrift in the expanse of time between major tax laws.

Despite the absence of major legislation or cases, there has been an abundance of surprises, ironies, incongruities, factoids, and outrages. Billionairess Leona Helmsley, the so-called "Queen of Mean," died at age 87 leaving $12 million to a Maltese dog named "Trouble." The Supreme Court allowed Liz Taylor to keep a painting. Among other posthumous conflicts, a judge divided the cremated ashes of a child between divorced parents, the Gipper's DNA was recovered (on ESPN) and Simon Wiesenthal was un-baptized.

So without further adieu, join us for a tour of highlights from the year gone by

Estate Tax, Yadda Yadda...

There were estate tax proposals this year, but it was apparent they weren't going anywhere. There was a measure introduced by Senator Jon Kyl (R-Ariz.) to keep the estate tax with a $5-million exemption and a top rate of 35%, but it lost by a vote of 48 to 51 in March. There was also an unsuccessful attempt by Senator Bill Frist to attach permanent estate tax repeal to the increase in the minimum wage.

The highlight of the year came recently when a distinguished panel that included Warren Buffet and Conrad Teitell addressed the Senate Finance Committee about the estate tax. Buffet opposes repealing the estate tax and advocates the use of estate tax revenues to help low-income households. Teitell warns that people deferring planning while waiting for Congress to act are placing their estates at risk.

The last time American estate planning had such a high-profile moment was when Jonathan Blattmachr, Howard Zaritsky, Sanford Schlesinger, and Stephen Leimberg appeared on the Rikki Lake daytime talk show to talk about how the repeal would not last. Ironically, the repeal is still counting down to 2010, but that redoubtable forum of tax analysis known as the Rikki Lake Show went off the air in 2004. Fortunately, someone was able to set up the next best thing-a Congressional hearing.

Although the presentation before Congress was more dignified, the lack of enthusiasm reflects how old a topic can get after six years. The next major shift in the law is the increase in the estate tax exemption to $3.5 million in 2009. Perhaps that is the new deadline for change.

Celeb Win Streak at Top Court

Celebrities now have a two-year winning streak going at the U.S. Supreme Court. In 2006, it was Anna Nicole Smith who got the good news that she could continue with her appeal to recover a portion of the estate of oil tycoon J. Howard Marshall.

This year, the Court's refusal to look at an appeal from the Court of Appeals means that actress Liz Taylor will be able to keep a valuable painting.

In 1963, Liz Taylor purchased Van Gogh's 1889 painting "View of the Asylum and Chapel at Saint-Remy" for $257,000 at a Sotheby's auction in London. Some time later, it was asserted that the painting had been sold under duress in 1939 by a woman who was forced to flee Nazi Germany.

The U.S. Supreme Court has allowed an Appellate Court decision to stand. Descendants of the previous owner of the painting were time-barred from seeking the return of the painting. A 1998 federal law concerning the return of artworks confiscated by the Nazis was not applicable and does not give individuals the right to sue private owners.

Publicity Rights...and Wrongs

In recent years, the descendants of four deceased photographers who had taken pictures of Marilyn Monroe have filed lawsuits to sell the images they inherited. Four lawsuits had been pending in Indiana, New York, and California. Determining the decedent's domicile was critical because state publicity rights vary. Ms. Monroe was born and raised in California, which protects publicity rights, but moved to New York seven years prior to her death.

On May 4, 2007, a Federal judge in New York ruled that Monroe's rights of publicity ended at her death. The inherited photographs can be sold and used. "[I]t is not necessary to resolve the question of domicile," said the Court, "because neither New York nor California * * * permitted a testator to dispose by will of property she does not own at the time of her death."

Anna Nicole Smith was channeling Marilyn Monroe in many ways during life and appears destined to also break new ground in the area of post-mortem publicity rights. After her death in February, weeks of televised hearings and media frenzy took place over where her body would be buried, who was the father of her baby, and who would control her estate.

Her diaries were sold for $500,000. Tapes taken from her home were televised. Exclusive interviews with Larry Birkhead were sold for over $1 million. Anna Nicole Smith may not achieve the icon status of Marilyn Monroe, but the merchandising of her posthumous publicity rights and invasion of her privacy reflects our culture's voracious appetite for notoriety.

Posthumous Disturbances

KING SOLOMON, 2007: In a case of first impression, Judge Musmanno of the Pennsylvania Superior Court ruled that trial courts have the authority to divide cremated remains among next of kin, but that the trial court abused its discretion where the father of a deceased child objected to such division. The divorced parents of the child could not agree on where the ashes are to be buried.

A DIAMOND was to be made from the cremated ashes of a 19-year-old German woman's father until the girl's 86-year-old grandmother took legal action. The Wiesbaden district court said, "The daughter of the deceased could not provide sufficient proof that it was his final wish to be pressed into a diamond." (The ashes were to be compressed into a diamond by a company in Switzerland.)

GREENHOUSE GASES such as carbon dioxide that are released by cremation contribute to global warming, warned Australian scientist Robert Short this year. He recommends burial in a cardboard box under a tree as the most environmentally favorable approach. [See following story.]

JUST KIDDING: Rolling Stones guitarist Keith Richards made international headlines after he told a reporter that he had mixed his father's ashes with cocaine and snorted them. Richard's later said he was just joking. "The truth of the matter is that I planted a sturdy English Oak," wrote Richards on the Rolling Stones website. "I took the lid off the box of ashes and he is now growing oak trees and would love me for it!!! I was trying to say how tight Bert and I were. *** I wouldn't take cocaine at this point in my life unless I wished to commit suicide."

THE GIPPER'S DNA: College football hero George Gipp (the "Gipper" of Notre Dame) was exhumed to recover DNA for a paternity test-which was negative. A purported daughter, who had been told that Gipp was her father, had died in 2006 at the age of 86. Portions of the Gipp family were extremely displeased by the proceedings, which were filmed by ESPN. Gipp died in 1920 during his senior year. He was played by Ronald Reagan in the 1940 movie "Knute Rockne."

HARRY HOUDINI'S grandnephew is seeking an exhumation of the great magician's remains to determine if the cause of death was poison rather than a ruptured appendix. The family of Houdini's widow opposes the exhumation.

WICCAN SYMBOL: Another posthumous controversy involved a Wiccan pentacle symbol that was placed on the memorial plaque of Sgt. Patrick Stewart who was killed in Afghanistan when his Chinook helicopter was shot down. About 1,800 active duty soldiers identify themselves as Wiccan. A year-long lawsuit against the Veterans Administration resulted in placement of the pentacle on Sgt. Stewart's grave. "Our people are on the front line in the war in Iraq and Afghanistan, and it's not right they're not getting equal treatment," said Reverend Selena Fox, a Wiccan leader.

MORMON BAPTISMS: The Church of Jesus Christ of Latter-day Saints, also known as the Mormon Church, has had adherents engaging in the practice of baptizing the dead by proxy since the 1840s. This practice has been applied to celebrities, presidents, and popes. The list of those baptized has included Adolf Hitler, Joseph Stalin, Genghis Khan, Mao Zedong, King Herod, Al Capone, and Mickey Mouse.

Controversy arose when it was discovered that Jewish Holocaust victims were being baptized by proxy. In 1995, there was an agreement to stop this practice. However, famed Holocaust survivor and Nazi hunter Simon Wiesenthal was vicariously baptized sometime after his death on September 20, 2005. When the proxy baptism was discovered, a demand to remove Wiesenthal's name was made by Rabbi Marvin Hier on behalf of the Simon Wiesenthal Center on December 18, 2006.

"We are astounded and dismayed that after assurances and promises by the Mormon Church that Mr. Wiesenthal's life and memory, along with so many other Jews, would be trampled and disregarded," said Rabbi Hier, "Simon Wiesenthal was one of the great Jews in the post-Holocaust period. He proudly lived as a Jew, died as a Jew, demanded justice for the millions of the victims of the Holocaust * * * ."

The church immediately complied and removed Wiesenthal's name from the International Genealogical Index later that same day. The church also acknowledged compliance with the 1995 agreement. "They did the right thing," said Rabbi Hier.

Miscellaneous Eye Openers

GRATEFUL DEAD: Over the past seven years, the Department of Agriculture has sent $1.1 billion to more than 170,000 deceased farmers. "It's unconscionable," said Senator Charles Grassley, "that the Department of Agriculture would think that a dead person was actively engaged in the business of farming."

SPECTACULAR ART BEQUEST: Supermarket Tycoon Simon Sainsbury left 18 paintings worth $200 million to the Tate Museum in Britain and the National Gallery. Included are works by Monet, Degas, Bacon, Gainsborough, Gauguin, and Rousseau.

LOL OF THE YEAR: A hypothetical "advertisement" posted online by Texas Attorney Rob Robertson purports to assist taxpayers wishing to take advantage of the estate tax repeal that currently lasts only during 2010. "Your demise guaranteed or we pay the tax," reads the faux ad.

Estates In The News, 2007

"Putting off decisions until Congress acts can be hazardous to your wealth."
- Conrad Teitell, testifying to the Senate Finance Committee, November, 2007.

THE MAESTRO: Luciano Pavarotti wrote two wills in the months before his death in September at age 71. Half of the great tenor's estate will go to his second wife, half is divided equally among his four daughters, and his assistant and the assistant's companion will each get bequests of $693,350. The new wills were written to make sure the three adult daughters from the first marriage and the four-year-old daughter from the second marriage are treated equally. The second will merely elaborates and confirms the first.

The estate was estimated in the press to be $275 million but attorney Giorgio Bernini, representing Nicoletta Mantovani (the surviving spouse), indicated that amount was exaggerated. The three adult daughters felt compelled to publish a letter rebutting reports of "purported bickering, phantasmagoric wealth, and last wills and testaments that we don't know anything about."

HENDRIX ELECTRIC VODKA: Jimi Hendrix's family sued a company that is selling Hendrix Vodka in a purple bottle with the late rock star's face and signature above the label. The Seattle business involved claims the family does not own the rights to Jimi Hendrix's name and image, just his music. The family is outraged because Hendrix's death was tied to alcohol consumption, and termed the campaign "a sick joke."

ROSA PARKS: Thirteen nieces and nephews had feuded with administrators of the estate of civil rights icon Rosa Parks since her death in 2005. This year a settlement was reached. The estate was left to a nonprofit organization Ms. Parks had founded.

JAMES BROWN: "I, James Brown, also known as The Godfather of Soul..." is how the last will and testament of James Brown begins. The famed singer died on Christmas Day, 2006. Since that time, several disputes have arisen among his surviving heirs. At the time of his death, Brown was living with his five-year-old son James Brown, Jr. and his wife Tomi Rae Hynie. After Brown's death, Hynie was locked out of the house and a will signed in 2000 before attorney Strom Thurmond, Jr., was probated.

The estate claims that Hynie and Brown were not legally married because at the time of the marriage, Hynie was still legally married to another man. That marriage was subsequently annulled, but Brown and Hynie never remarried. Brown's will provides for six of Brown's children, but makes no provision for James Brown, Jr. Hynie is seeking 50% of the estate and one-seventh of the remaining 50% of the estate for her son. Hynie and Brown's six adult children have united in a legal effort to remove the trustees of the estate for mismanagement.

Meanwhile, Brown's first wife Velma Warren Brown claims that she was never served divorce papers and therefore was still legally married to Brown at the time of his death-notwithstanding the fact that she subsequently remarried.

ESTATE OF WANG: Nina Wang, one of Asia's wealthiest women, died April 3, 2007. Mrs. Wang was called "Little Cutie" and was known for having her hair in pigtails and wearing mini skirts. In 1983, her husband Teddy Wang was hijacked while driving his Mercedes and held for eight days. Ransom of $11 million was paid and Teddy Wang was returned in an iron box by the side of the road. But in 1990 he was kidnapped again and was seen no more.

The Wangs were childhood playmates who renewed their friendship when they were 11 and 15, respectively, and who married in 1955. In the 17 years since Teddy Wang's second and final disappearance, Nina Wang guided Chinachem Group into a major property developer.

In 2002, after Teddy Wang was presumed dead, a trial court issued a 500-page decision that concluded his 1990 will had been forged. This was overturned in 2005. Two of Mrs. Wang's wills have been published in the media. A 2002 will left her estate to a charitable trust. A 2006 will leaves the entire estate to Nina Wang's feng shui consultant, Chan Chun Chuen, 48. Nina Wang had no children. Her brother and two sisters have challenged the 2006 will and filed a writ to uphold the 2002 will.