Life Happens

Episode Transcript

Speaker 1 (00:01):
Good morning, Welcome to Life Happens. Are you prepared?

Speaker 2 (00:03):
This is our weekly radio program for baby boomers and
their families where we address the challenges we all face
as we age. We talk about aging as a lifestyle,
the issues that must be confronted, and the careful planning
that's required to avoid crisis in the future. Life Happens
will provide you with tools to educate and prepare yourself
for events like retirement, protecting your income and assets, planning
to pay for nursing, home and home care, special needs

(00:25):
wills and trusts, and planning for an untimely death, and
resolving disputes in and out of court.

Speaker 1 (00:31):
Good morning, everybody.

Speaker 2 (00:32):
I'm Marion Connor from pier O'Connor and Strauss, joined by
Brent Stack, litigation associated at our firm.

Speaker 1 (00:37):
Good morning, Brent, Good morning Aaron.

Speaker 2 (00:40):
So, as you may guess, because we're both here, we're
going to talk about things that have gone wrong, and
generally things that have gone wrong are better pressure points
for people to do things to act. When people hear
the things have gone right, they should do this or

(01:00):
they should do that. They tend not to act as
much as when they see what the disaster can be
on the other side. So we're going to spend some
time talking about that before we get into the depth
of that, though, I do want to let everyone know
that on Thursday, June twenty sixth, we're having a barbecue
bash at our.

Speaker 1 (01:17):
Office at outside.

Speaker 2 (01:19):
Our office at forty three British American Boulevard and Latham,
and that's to benefit two charities, Living Resources and the
Veterans and Miracle Center. Ticket proceeds of thirty dollars per person.
We'll get you a chicken dinner to eat or take home.

Speaker 1 (01:31):
Blis.

Speaker 2 (01:31):
There's music and games and raffles and face painting and
all sorts of fun. So if you'd like to do that,
you can sign up by June twenty third by calling
the office during the week. If we're sending an email
to pure Law info at puro law dot.

Speaker 1 (01:48):
Com, that's pie r r.

Speaker 2 (01:50):
O law dot com.

Speaker 1 (01:52):
All right.

Speaker 2 (01:53):
So generally, when Brett and I are involved, as I said,
things have gone wrong can be any number of things.
It can be lifetime things, it can be post mortem things.

Speaker 1 (02:04):
Right, So.

Speaker 2 (02:08):
A lot of people probably don't picture lifetime litigation in
our office, but it does happen quite a bit.

Speaker 1 (02:15):
It happens during periods of incapacity, whether those are new
incapacitations or they're long, long term incapacitations. And what I
mean by.

Speaker 2 (02:26):
That is we do a fair amount of young people
guardianships that are born with disabilities, right, and those are
called seventeen A guardianships, So that strangely, seventeen A guardianship
can also be done if you develop a TBI.

Speaker 3 (02:43):
I think before the age of nine.

Speaker 2 (02:45):
But that's the only one that isn't like a birth
disability exactly. So seventeen a's now, seventeen a's have gotten
more and more tricky over the years, and it's mostly
for good, for a well intended reason.

Speaker 1 (03:03):
Let's put it that way.

Speaker 2 (03:05):
That they want they meaning the government, right, the New
York State legislature and whoever has lobbied them, want people
under a seventeen A guardianship to have more autonomy when
it's warranted.

Speaker 3 (03:16):
Right, Yeah, I think they used to. They used to
and maybe still do, call it the parents guardianship because
typically it's a guardianship that is commenced by wanner or
both of the parents to coincide with the child with
the disability attaining age eighteen, right, and becoming an adult,

(03:36):
so that parent or parents can continue to act in
the in the exact same way that they have as
parents of the child. Now an adult with disabilities to
continue to make residential placements, residential program placements, educational program placements,

(03:57):
and most importantly, probably doctors' visits.

Speaker 1 (03:59):
Right, That's what I was thinking to you.

Speaker 3 (04:01):
Because the doctor should when that child attains adulthood, A
good doctor, an ethical doctor, and one who knows what
they're doing, will have to tell those parents listen, this
is an adult. I cannot I can't share this medical
eight information with you anymore, and you can't make decisions anymore.
So yes, parents with children who have disabilities should probably

(04:26):
start getting their ducks in a row around age seventeen
to commence these applications so that they you have a
seventeen eight guardianship in place by age eighteen. But yes,
you're right in that the other type of guardianships that
we do under Article eighty one of the Mental Hygiene
Law can be tailor made to fit the specific needs

(04:50):
of the disabled person. But under Article seventeen A, you're
either guardian or you're not.

Speaker 2 (04:57):
Right and so, and there's less reporting, Okay, and what
we mean by that is almost none. Right, when you're
a guardian, you have to show how you've spent money
under our article eighty one, what's command what's going out
with the assets of the person are and you have
to disclose that you've at least visited them four.

Speaker 1 (05:14):
Times a year. I know that sounds terrible, but that's
the actual standard.

Speaker 2 (05:18):
It's not weekly, it's not monthly, it's you know, quarterly,
you just check in. You know, hopefully it's more than that,
but that's the actual standard. But more and more I've
had people come to me and we are discussing maybe
doing a seventeen A, but we end up in a
much better scenario where we do a power of attorney
in a healthcare proxy. And because the person, while they

(05:42):
need some assistance, does have capacity, right, they understand that
mom or dad can help them out.

Speaker 1 (05:49):
And a lot of times.

Speaker 2 (05:50):
Young people don't want to deal with their finances anyway, right,
Oh mom or dad will take my money and pay
my bill's great right, sign me up. And as long
as the person is willing to do that, it can
really simplify the situation quite a bit. Because one it's
cheaper to do that two, it's much less invasive. There's

(06:12):
no medical filings, there's no court proceeding, but you have
to have a level of capacity that not everybody has.

Speaker 3 (06:19):
Yeah, much less invasive, and I think that the emphasis
really should be placed on that. You know, because you
and I both know, to go into court and establish
in capacity, you have to have a family member who
basically details another family member who a very loved one,
very dear one. You know their functional limitations, and that's

(06:43):
very personal. Yes, and it's hard to recover from for families.

Speaker 2 (06:47):
I mean, we're talking about toileting sometimes, we're talking about showering, right,
we're talking about whether they remember who people are. It's
not something you really want to err in front of
a lot of people if you can help it. And
I mean again, ninety five plus percent of the time,
an older person can avoid guardianship by doing a health
care proxy the power of attorney.

Speaker 1 (07:08):
Yep.

Speaker 3 (07:09):
Yeah, I mean the case law, as you and I
both know, case law has well established that in the
event that someone who had capacity at the time executed,
both of those advanced directives have alleviated the need for
guardianship proceeding in the future. There's not much you can't

(07:31):
do without a health care proxy and a power of
attorney that you can do with a guardianship. Sometimes it's
necessary to go the extra mile and get a guardianship
even if you have all of those advanced directives in place.
But for the most part, no, that's sufficient.

Speaker 2 (07:44):
Correct And more often than not, when someone has had
a power of attorney in a health care proxy, there's
been one of two issues that have led to a guardianship.
One they were poorly drafted, meaning they don't have the
powers that they need to have, or there's a lack
of successor so a husband of points a wife, wife dies,
husband becomes incapacitated, or vice versa, something like that with

(08:07):
no successor we're right back to guardianship. Or once in
a while, it's an abuse situation, right someone's taking advantage
of somebody and we can't it's not going to work
just to revoke that because there might not be capacity
to revoke it, there might be other issues. So but well,

(08:28):
well above ninety five percent of the time, those documents
are going to carry the day. So, as we say
all the time, a little bit of planning can go
a long way. Right now, we'd like you to do
more than a little bit of planning, because we want
you to have a complete plan.

Speaker 1 (08:43):
We want to cover our bases.

Speaker 2 (08:44):
But those documents will help the other thing that we
should just briefly, I think mention about seventeen A guardianship
is there's now assisted decision making.

Speaker 1 (08:54):
Right yep.

Speaker 2 (08:55):
And in practice, this is my opinion, kind of a
nightmare because it's not it's not really clear what the
lines are for that. And one doctor may say that
this a person is suitable for that, and one may not.
And that can be revoked. Okay, Now healthcare proxy and

(09:15):
power attorney can be revoked to but you have to
execute documents to do that. So I just I see
the benefit to some of it, but I don't know
that having this kind of nebulous gray area is really
going to help anybody.

Speaker 3 (09:30):
Yeah, and you've got you know that you've got the
health the Family Health Care Decisions Act, Article seventeen fifty
B of the Circuit corporatesy direct And you know in
times of crisis, when a doctor comes to you as
a family member and says, you know you, we believe
you have the power to act under the Family Health

(09:52):
Care Decisions Act, and you don't know what that means
right now. It's it's hard to know that you're going
to make the right call, right and to be put
in that situation.

Speaker 2 (10:01):
And if it's a child, right, there's usually two parents,
not always, but usually, and if you we've had these
situations where the parents are divorced and have diametrically different
ideas and that's the same as having.

Speaker 1 (10:15):
No agent exactly.

Speaker 2 (10:17):
So yeah, it can be really a problem. You know,
we Brett and I have actually been involved with at
least I believe more than one, but at least one
where we did an article Lady one guardianship for a
young person because the parents didn't get along and there
were a lot of issues that really could only be

(10:37):
solved in the guardianship arena.

Speaker 3 (10:40):
Specifically an arc lady one. Right, we couldn't have done
what we did under Article seventeen A. There's just not
room for.

Speaker 2 (10:49):
It, right, And we basically came to essentially what you
very similar to a family court order of when a
parent would have visitation with a child and how all
even to the minutia of transportation, right.

Speaker 3 (11:04):
Yeah, And I think I mean that's it's unfortunate to
know that this occurs. But essentially what occurred is this
is a family who fought over custody, probably since you know,
the child was very young until age eighteen. And then
the custody battle turned into a guardianship battle, right kind
of within the same you know, the same issues and

(11:30):
with the same parameters, and we worked it out as
if it were kind of a family court litigation situation,
and we're able to come to a pretty good result.
So sometimes, yeah, guardianship although it's discouraged, and I think
the Supreme Courts will discourage families from carrying on their

(11:53):
custody disputes into guardianship matters, but sometimes it happens, and
sometimes that's the only place that we can come up
with the result for our clients.

Speaker 1 (12:01):
That's all right.

Speaker 2 (12:02):
So I think that's a good place to take our
first break. When we come back, we're going to get
into some i'd say fairly interesting and you see state
battles from some high net worth individuals. So I am
Aaron Connor. This is Life Happens Radio. We're members of
Pierre O'Connor and Strouss and we'll be right back after

(12:23):
this break. Welcome back to Life Happens Radio. Aaron Connor,
Pire O'Connor and Strouss joined by Brent Stack. We are
litigators by trade, and in this realm we only do
a state and trust litigation. And as we talked about
some guardianship litigation about a week ago, I ran across

(12:43):
a very kind of wild set of facts case.

Speaker 1 (12:50):
It actually begins in I think.

Speaker 3 (12:54):
About twenty tween.

Speaker 1 (12:56):
Twenty died.

Speaker 2 (12:59):
So we're talking about the CEO of Zappos. And if
you don't know, zappo's good for you because.

Speaker 1 (13:07):
You know it's shoes.

Speaker 2 (13:09):
So there was a time when there were many boxes
coming from my wife from zep for Zappo.

Speaker 3 (13:14):
So I think they got into clothes too. I think
they got into everything.

Speaker 1 (13:17):
Yeah.

Speaker 2 (13:19):
So but their CEO, Tony, she died young forty ish,
I believe so. And he was worth about five hundred
million dollars. And so obviously this was just it wasn't
It was a surprise to everyone that who passed away.

(13:41):
So there wasn't a lot of knowledge about preparation. So
eventually what we would call an administration was filed. That
means that it's the absence of a will. Now this
is in Nevada, Okay, in New York. We're often telling

(14:03):
people something that they are very surprised to hear is
that when there's an absence of a will and you
have a wife and children, the wife, well, let's just
say spouse, the spouse doesn't get one hundred percent. And
this is often like a huge kind of slap in
the face to people because if the children are miners,
it's very much more complicated too, and if there's real

(14:24):
property or business, that can be very very difficult.

Speaker 1 (14:30):
I don't know, can't speak to Nevada right in New York.

Speaker 3 (14:34):
It's it's the law and testacy right passing without a will.

Speaker 2 (14:38):
So for five years, which is not unusual for an
estate this size to take a five years to administer
because there are a lot of assets, there's probably a
lot of either stock or stock options or membership shares
that have to be dealt with.

Speaker 1 (14:56):
You would hope.

Speaker 2 (14:58):
That with companies like this, I would be shocked if
there weren't. There are bisell agreements, there's valuation clauses, you know,
all those things can still be fought about. But and
they might not want to liquidate everything all at one
time because there's a huge estate tax issue here too.
Five hundred million dollars. The current federal threshold is below

(15:20):
fifteen million dollars for an individual. So here he's potentially
his estate is potentially paying tax on four hundred and.

Speaker 1 (15:29):
Eighty five million dollars. Ouch. Yeah, so you're looking at
millions in estate tax. So maybe that'll help the deficit.
Not sure.

Speaker 2 (15:41):
You know, there aren't too many payments that are going
to make a dent, but that that might make a
little doubt. But in all seriousness, so it's a problem.
And I believe his father was the administrator of the estate,
the person in charge and all of that. Okay, I

(16:03):
mean shocking that he didn't have some documents, but he
was a relatively young person. But that's not where it
got weird. It got weird just about a month ago
when a will mysteriously appeared.

Speaker 3 (16:18):
In an unmarked envelope.

Speaker 2 (16:21):
I mean, like if it were a novel, you'd be like,
that doesn't say and this will supposedly executed by Tony
she said, it appointed a lawyer who had never met Tony.
She right, So, I mean there's a lot of things
here that don't necessarily pass the smell test.

Speaker 3 (16:46):
But he exists. The guy exists, Robert. You know, at
least there's that, right, so, which complicates things further. It
had been Mickey Mouse, it probably just would have gone away.
But no, this this guy's real, right.

Speaker 1 (17:03):
And the will.

Speaker 2 (17:06):
Reportedly directs a bunch of the assets fifty million okay,
into several trusts, a series of trust with unnamed beneficiaries
okay that they're probably not named in the will, okay,
but I'm.

Speaker 1 (17:23):
Let's just.

Speaker 2 (17:25):
I think that's the New York Post being the New
York Post, you know, and then like dramatic music plays
after that sentence. But it'd be interested to know, interesting
to know whether these trusts exist, right.

Speaker 3 (17:41):
And if they exist, have they been funded?

Speaker 1 (17:43):
Right? And who's the trustee? You know?

Speaker 2 (17:46):
So it it just And the will also includes a
three million dollar gift to Harvard, so obviously they're in
line to say, yeah, we want the three million dollars.
And I'm also reading that it concludes what's called an
terorum clause, meaning that if you can test the will,

(18:07):
you're going to lose your share, So.

Speaker 3 (18:13):
Which courts have routinely held as valid.

Speaker 1 (18:16):
In New York.

Speaker 2 (18:17):
In New York, Florida got rid of them altogether. I
think honestly, we should get rid of them all together.
I don't think it's right. It's usually to protect a
bad actor more than it is to stop anything else.
And so, you know, the guy who found the will

(18:39):
said that it came from his grandfather, who I guess
was an attorney maybe involved with this.

Speaker 1 (18:45):
So I really I can't.

Speaker 2 (18:49):
Wait for the the you know, lifetime movie about this one,
because it seems like it has that plot. But now
what will happen is that will will either be accepted
or rejected. And it's not as simple as just filing
that will and the court saying okay, I'm sure the

(19:09):
family on the other end is going to want to
at least how we would handle it in New York,
right would be to do a fort what's called a
fourteen oh four where you examine the witnesses to the
will and say, when did this happen?

Speaker 1 (19:24):
What were this who drafted the will? As well?

Speaker 3 (19:27):
What colored shirt was he wearing when he signed it?

Speaker 1 (19:29):
Right? Well, where's the rest of the planning? Right? Right
as well?

Speaker 2 (19:36):
Because it would be very odd to just do this will,
and it's very odd that this will existed wherever it did, and.

Speaker 1 (19:47):
I mean just the fact of the value of this estate.

Speaker 2 (19:51):
It's not the kind of person who would go to
a small practitioner to do something right. And I do
want to say this to peop We have encountered problem
after problem when people have done a will with a
small general practitioner. They retire, they've died, they've moved away,

(20:14):
many many times, we can't find the original will. So
if you are a person of some means, you really
want to make sure that you use a firm that
is going to be around for a period of time. Now, look,
you can take your original will with you. Yep, Okay,
that's it's an option. I don't think it's a great option.

(20:38):
But if you are using a bigger firm, they're going
to let you know when someone has transferred your will.
When someone retires, they can file the will for safe
keeping with the surrogates court.

Speaker 3 (20:51):
Yeah, for a very minimal fee.

Speaker 2 (20:52):
Right, But if they have one hundred, you know, hundreds
of wills, I'm not sure how many they're going to
do that with, so that that's an issue as well.
So just please be cognizant of what may happen if
you do not.

Speaker 1 (21:07):
Know where your original will is.

Speaker 2 (21:10):
So I love this line in the story, it said
that Shay was at the end of his life, was
living a semi reclusive life marked by erratic behavior and
substance abuse.

Speaker 1 (21:24):
I mean.

Speaker 3 (21:26):
Could be when he executed this mystery will.

Speaker 2 (21:29):
Right, and that substance abuse would be a potential incapacitator.

Speaker 1 (21:35):
Yeah.

Speaker 3 (21:36):
The other big issue here is what effect is this
going to have on the administration of the Intestine a state?

Speaker 1 (21:42):
Right, what's been done already?

Speaker 3 (21:43):
What's been done already? And can it be undone? Where
are the assets that may have been distributed? And once
these beneficiaries are named and come forward, they've got an
uphill battle at recovering these assets if they've already been
distributed to say, for instance, charitable and institutions or other
family members. So believe it or not have had this case,

(22:05):
this could be a complete nightmare.

Speaker 2 (22:06):
Where we finished an administration and then people tried to
come forward with a copy of a will.

Speaker 1 (22:12):
Well, a copy of a will is not an original will,
all right?

Speaker 2 (22:15):
And I said, essentially, you're welcome to try to do
something with that, but I don't think you're going to
get very far because the presumption is if there's only
a copy that the original was destroyed. But if they
were somehow able to probate that copy, the other people
are the laws holds that they have to bring the
money back even though they've signed receipts and releases accepting it.

Speaker 1 (22:39):
So you know, that is just such.

Speaker 3 (22:42):
A And if the money is real estate, for instance,
you know somebody's somebody's moved into a.

Speaker 2 (22:49):
Home, right But just honestly, I don't think it's good
the way the law treats that.

Speaker 1 (22:54):
There has to be some finality.

Speaker 2 (22:57):
And I mean if there's a good reason for why
if the people who took the money suppressed a will
saying otherwise, that's a different story. But there has to
be finality to an estate. And I mean people are
going to spend money, They in good faith can spend
that money. As long as they didn't know exactly you
can get very tricky. So the idea is to do

(23:19):
some planning while you have your marbles, while you know
who you want to get stuff, while you know what
you have. I'm often amazed at how many people don't
know exactly what their assets are and don't have that.
So we're coming up on the news we'd come back.
We're going to talk about another celebrity, Jimmy Buffett, and

(23:40):
some things that have not really flown smoothly there.

Speaker 1 (23:45):
I guess.

Speaker 2 (23:47):
The parrot heeads are having some problems. So I'm Aaron
Connor from pure O'Connor and Strauss and we'll be right
back after the news. Welcome back to Life Happening Radio.
Aaron Connor, piro'connor, Strauss joined by Brent Stack. And we've
been talking about the disasters that we see. I don't

(24:08):
think there's any other way to put the disasters. And
I did want to just briefly mention that we we
did lose Brian Wilson this week. And I did read
this great story where Don Henley was a big time
Beach Boys fan and he was watching him on Beach
Boys concert backstage this is when he was famous, and

(24:28):
he brought his copy of pet Sounds and he brought
it to Brian Wilson and asked him to sign it,
and Brian Wilson said sure, and he signs it and
it says Don, thank you for all the great songs
Brian Wilson. Don starts to walk away and Brian says, hey,
come back here for a second, and he does, and
Brian Wilson crosses out great and changes it to good.

Speaker 3 (24:52):
So, boy, that's something else.

Speaker 2 (24:57):
We didn't really bother him enough that it was like so,
I mean, I think he was a man of some idiosyncrasies.

Speaker 3 (25:04):
I think so.

Speaker 2 (25:05):
But and also a man who was under a conservatorship
exactly so, which is essentially the same as a guardianship.
Because he had some issues. He was taking a handage
of issues. And now that kind of makes sense. Actually, yeah, yeah,
I don't. I don't know if he had children or children.
I think I know he had a wife, but I
don't know about children. So, you know, musicians tend to

(25:31):
be a very fertile ground from us. Tom Petty had problems.
You know, a lot of times they've set up some
sort of a state plan, they've done some work. We've
seen more and more musicians sell their royalties prior to death.

Speaker 1 (25:46):
I think Dyalen did that. Yeah, I think there.

Speaker 3 (25:48):
You know, they can be people who who passed before
they've had time to do their planning.

Speaker 1 (25:54):
That's certainly true.

Speaker 3 (25:55):
For instance, Prince died he didn't even have a will,
right And I read today in an article that forty
three people came forward and said that they were the
rightful error to Prince's vast estate forty three different people.
Can you imagine like the courtroom.

Speaker 2 (26:13):
Well I was one of them. Yeah, no, I'm just
gonna but no, yeah, I And everybody's got a lawyer up.
So I mean it's not it's not ready, but more
and more musicians are selling their royalties for a set
value because it becomes one really hard to manage those downstream. Ah,

(26:37):
you know, and how many people are you going to
have manage those? If you've got three kids, are gonna
let one kid manage them?

Speaker 1 (26:42):
And not so?

Speaker 2 (26:43):
And it also sets a value for state tax purposes, right, right,
so then you know what this is X is worth
and you can kind of move forward with the plan
to mitigate a lot of those taxes.

Speaker 1 (26:55):
Right.

Speaker 2 (26:56):
So, I mean we all wish we have an a
state tax problem, but very few people actually do.

Speaker 1 (27:02):
Now.

Speaker 2 (27:03):
In New York, if you've got more than seven million,
you having a state tax problem. Federally, if you have
more than twelve million, you're probably having a state tax problem.
So if that's you, let's talk. But I understand that
that is not most people by any stretch of the imagination.
So Jimmy Buffett died in oh four, twenty four or

(27:26):
twenty three.

Speaker 1 (27:26):
Okay, so Jimmy Buffett made a lot of money.

Speaker 2 (27:33):
I don't think that he had a lot of necessarily
hit songs, right, I mean, he certainly had Margaritaville, right, but.

Speaker 3 (27:40):
Yeah, state valued at an estimated two hundred and seventy five.

Speaker 2 (27:43):
Million, right, But that's because he monetized things. So you
got it developed a following. And I've even stayed at
a Margaritaville in Orlando, not because I'm a huge Jimmy
Buffett fan, but it was a nice place. It had
a it was easy, it was all in a community,
nice pool.

Speaker 1 (28:00):
You know. So he he created a lot of value
or recognized value. Yep. And he did some planning. But
issues him now between the wife and who co trustee?
And who is the co trustee?

Speaker 3 (28:19):
I think it was.

Speaker 1 (28:22):
It's an accountant.

Speaker 3 (28:23):
Yeah, it was one of his business associates, maybe a
business manager. Yeah, so you know, probably the guy who
did the planning.

Speaker 2 (28:33):
No, it's an accountant, so it can't be the guy
who did the planning. But I'm sure that they're all interconnected.

Speaker 1 (28:41):
And Richard Mozeentter, Yeah, he paid one point he was
paid one point seven million dollars in twenty twenty four
to manage Yeah.

Speaker 3 (28:51):
I think in commissions, right, his trustee commissions.

Speaker 1 (28:53):
Yeah, but that's a huge amount of money, a.

Speaker 3 (28:55):
Huge amount of money. But you know, as we know,
commissions are statutory. It's a it's a percent of the
value of the money's managed.

Speaker 2 (29:04):
But it could have been limited, yes, right, could have
been limited in the trust document. So I mean, if
your commission is one point seven million dollars from managing
a trust, you really don't need probably another job, right exactly.

Speaker 1 (29:22):
It's kind of nuts.

Speaker 2 (29:23):
So but then he filed his own petition to remove her,
which I think he's going to have a much harder
time with because I don't. I don't she's the wife,
like she's an actual person to the estates, you know
what I'm saying.

Speaker 3 (29:38):
So, Yeah, And the crux of the issue here is
something that we see all the time in our practice
is where you know, the beneficiary is just not getting
any information or any income from the trustee, and you know,
the trustees not being straightforward with how they're managing the trust,

(30:01):
and expected payments are not coming to the beneficiary, and
the beneficiary says, wait a minute, you know, I know
that there's this close to three hundred million dollars sitting
out there in my name.

Speaker 1 (30:13):
That's right.

Speaker 3 (30:13):
I see that the trustees taking his or her commissions
from the trust, and nothing's coming my way save for
I guess, and expected two million dollars at a at
a two hundred and seventy five right what she was
told she could be potentially entitled to. So here we
are open the courtroom doors.

Speaker 2 (30:33):
And each he had three kids with her, and they
each got two million dollars in a trust, which is
not a giant amount of money when you had two
hundred and seventy five right right now. I mean, some
people don't want to give their kids so much money
that they never have to work, right. I'm not sure
really where I feel about that. I'm not in that
position where I could give my kids enough money currently

(30:56):
since they did not have to work.

Speaker 1 (30:57):
But I don't know. I mean, I understand that there
is general.

Speaker 2 (31:05):
Feeling against people being trust fund babies, although there are
a number of them out there. Most people I meet
with want to give their kids some comfort or some
safety net, but do want their kids to make their
own way most of the time. So that might be
why it's only two millions of the kids.

Speaker 1 (31:24):
I don't know.

Speaker 3 (31:26):
I mean, I think Aaron also, this case has has
another similarity to certain cases that I'm working on. We're
working on currently. This mozenter the trust, the co trustee,
he's he's defending his tight handling of the trust based
on things that aren't expressed in the trust. But this

(31:47):
is what Jimmy told me while he was alive. I
don't think that, you know, I don't think that she's
very responsible with money. I don't. I don't want her
to have more control than you. But unless that's expressed.

Speaker 2 (31:59):
It sounds like belogny. I mean, that's the only way
I can describe it on the radio exactly so.

Speaker 3 (32:05):
And but this is what happened.

Speaker 2 (32:07):
That's yes, it often has tried to be held onto
by the trustee.

Speaker 3 (32:13):
But let's be honest, they often quote the words of
a dead person.

Speaker 2 (32:18):
She the wife here, I'm sure, is certain to a
very high standard of living, right, I mean, if you're
Jimmy Buffett's wife, you're not making trips to McDonald's for
lunch generally speaking, you know, So it does seem like
there should be more cash flowing out of there. I mean,
of the two cases, I think I'd want her case

(32:39):
more than his case. But we have seen this routinely
on a much smaller scale because the more money that's
in the trust to hire the commissions first of all.

Speaker 3 (32:48):
Exactly.

Speaker 1 (32:51):
So it's it's it's kind of nuts.

Speaker 3 (32:55):
And I think you've got an issue here, like, we
don't know how well mozeenter here got along with with
Jimmy Buffett's wife while they were living. But correct, did
Jimmy make the right call here on appointing these two
polarizing figures as co trustees? I mean, could he have
seen this coming?

Speaker 1 (33:12):
Right?

Speaker 3 (33:13):
You know, all the more reason to make sure when
you're doing your planning, and in this case, Jimmy did
his planning, but maybe he could have or should have
seen this coming.

Speaker 1 (33:24):
Well.

Speaker 2 (33:24):
Yeah, so this is kind of crazy town stuff, right.
She asks for information, he doesn't give it to her
for sixteen months. That's a giant red flag, yeah, right,
giant red flag. Then he says that the two hundred
and seventy five million will only create two million in income, right,
so that's one percent less than one percent, just less

(33:47):
but one percent.

Speaker 3 (33:48):
The worst financial planner in the world couldn't come up
with That's.

Speaker 1 (33:51):
Right, you could. You could put two seventy five into
a CD and get eight million.

Speaker 2 (33:57):
Dollars easy, right, right, I mean I know it's not
all liquid cash, but let's be real.

Speaker 1 (34:02):
Yeah, so that is I think just looney tunes.

Speaker 2 (34:07):
And then he's telling her that she should sell some
property if she can so. I again, much rather, there's
the side of this story.

Speaker 3 (34:16):
There's got to be more to this story.

Speaker 1 (34:18):
Oh, there's always more, right, But from.

Speaker 3 (34:20):
What's being publicized, Yeah, this co trustee looks like you know,
his days may be numbered, but you never know, you
never know what's going to happen when.

Speaker 2 (34:31):
Well, the first thing that's going to happen, you know,
is an accounting proceeding, right.

Speaker 3 (34:34):
And yes, yes, this is exactly what we would do.
We would file on a petition for an accounting and say, why,
what are the investments that we're looking at that's only
going to yield one percent?

Speaker 2 (34:48):
Well, it says twenty percent of the holdings in Margaritaville LLC.
I would assume that that's some cash. I mean, there's tequila.
Tequila is paid for in cash. Last I know, you know, cash,
your credit assets, you know it's gonna uh casinos, casinos
make money. So if those aren't producing money, I'd be shocked.

(35:12):
But if they're not, then there may be some mismanagement
there too.

Speaker 3 (35:18):
Yeah, I mean one percent is very close to loss.

Speaker 2 (35:22):
Yes, well, when inflation is factored, it factored into you know,
so it just and he is not a professional trustee, right,
So in a lot of these situations, you would see
let's say JP Morgan Chase Corporates some you know, a

(35:42):
high end bank, which.

Speaker 3 (35:44):
Is a pretty safe bet to go with the corporate trustee,
namely a.

Speaker 2 (35:47):
Bank, right, And they know their duties, they know what
they can pay for, they know what they can't pay
for it. They're going to have an in house lawyer. Yes,
they're going to want to hang on to the trust
just like this guy, but they're going to hold themselves
to the fiduciary standard much better than I think this

(36:07):
gentleman is, at least based on the facts that we're.

Speaker 3 (36:10):
Seeing, right, I mean, there's a big there's a big
gap between waste and you know, too much control, right,
and I think he probably should be getting closer to
the middle ground to avoid litigation, Like this, right.

Speaker 2 (36:25):
Yeah, we've we've made it. There's the power to adjust
to if there's not enough income. So what you can
take is take assets and move it to income if
you need to.

Speaker 1 (36:34):
Right.

Speaker 2 (36:34):
So, I mean you certainly think that two hundred and
seventy five million I would be looking for ten million
a year probably, right, I mean that's you know what,
seven or eight percent maybe?

Speaker 1 (36:48):
Yeah.

Speaker 3 (36:48):
And what we don't know when this is a big
factor and a lot of trust litigation that we do
is a lot of times aaron there's a residuary beneficiary
and we don't know, we don't know what that looks
it's like right now. Sure, So sometimes these trustees who
seem to be holding a tight grip on these finances
are doing so because they might, you know, once the

(37:13):
beneficiaries are have passed on or received whatever they were
supposed to receive, there was a residuary beneficiary, which means
an individual who gets all the rest that's left over.
So you see some of these trustees holding on to
as much as they can to benefit that person in
the long run. So we don't know if this mozenter

(37:35):
is in that class of persons.

Speaker 2 (37:37):
Right, he could be, He might not be, but he
may also just be trying to hold on as much
money as.

Speaker 3 (37:41):
Long as possible to collect his annual.

Speaker 2 (37:45):
Absolutely residuary benefitiaries matter. I think that's a good place
for us to take a break. Our final break of
the show, This is Life Happens Radio. Aaron Connor and
Brent Stack from Pierre to Connor and Strauss, and we'll
be back after this. Welcome back to the last segment
of Life Happens Radio. Aaron Connor, pure O'Connor and Stress

(38:05):
joined by Brent Stack. We are litigation attorneys for trust
and the State Litigation and we've been talking about things
that have gone wrong, mostly about a person who owns
Zappos and Jimmy Buffett, but it's not necessarily limited to them.
In the last segment, we had been talking about really

(38:28):
tension between trustees and beneficiaries. And that may be the
current beneficiary, it may be the long term beneficiary, right
what we call the residual beneficiaries. So often in a
marital trust, the spouse is the beneficiary for their lifetime
and then it goes on to kids, It may go
on to somebody else, you know, but sometimes a trustee

(38:50):
is afraid to give more money out because they're worried
about what the residual beneficiaries may do. So there tends
to be tension. And that's why I'm a big fan
of what's called a unit trust.

Speaker 1 (39:06):
Okay, So.

Speaker 2 (39:10):
In the nineties, let's say, many marital trusts, meaning when
there was a spouse and there was an a state
tax issue, would be set up as income only trusts,
and income is limited to two things, really, interest and dividends.
All right, I mean there could be rental income if
it owns rental properties, it would be net right, But

(39:33):
in most cases these were investment accounts.

Speaker 1 (39:37):
Will then come.

Speaker 2 (39:40):
Mid two thousands, right of the oughts or whatever you
want to call the first decade of the two thousands,
there's no interest anymore, right right, interests zero point three percent. Well,
these people had a big problem. They don't have any
income coming out. So we did do litigation on several
of these trusts to have them modified to be called

(40:03):
to be what's called the unit trust.

Speaker 1 (40:04):
Now, what is that.

Speaker 2 (40:07):
A unit trust is set for a certain percentage to
come out every year, no matter what. Could be paid monthly,
it could be paid annually, could be paid quarter annually, whatever,
But when it's set at five percent, let's say three
four or five percent is typical. It allows the trustee
or the financial advisor to invest as they see best.

(40:31):
They don't have to produce income necessarily. They can produce
growth and the same three percent is going to come out.
And if they produce growth, the three percent is going
to get bigger. But it also is getting bigger long
term for the other people. And a three percent unit
trust is never going to extinguish value, right right, ten
percent it might five percent, it would take a really

(40:53):
long time and a bad market. But what it does
is it takes the tension between an income beneficiary and
a residuary beneficiary out of the equation because.

Speaker 3 (41:05):
The principles kind of just not being touched.

Speaker 2 (41:07):
Right, If you're investing well, five percent is probably your margin, right.
I mean there may be a year around where it's
not great, but some years it's been nine or ten percent.
And I often encourage this even for normal people when

(41:27):
if they're going to leave a few hundred thousand to
somebody and they want to protect the money from that person,
right that person has a spending problem, they have a
drug problem, they have a spouse problem, whatever, and they
want to protect it. They want usually a sibling to
watch over this money. Well, that sets up a pretty
rough dichotomy between the person who's in charge and the

(41:51):
person who has a spending problem or whatever other of
those problems. But if you set it up as a
uni trust, then we've really taken that away, as the
same amounts coming out.

Speaker 1 (42:05):
No matter what.

Speaker 2 (42:07):
The person that is the beneficiary of that trust can
request more money under a very limited standard, which we
call hem's health, education, maintenance and support. It sounds a
lot broader than it actually is, but if there was
some dire need, they could potentially get more money out.

Speaker 1 (42:26):
But a unit trust.

Speaker 2 (42:27):
Generally removes a lot of the litigation concerns.

Speaker 3 (42:31):
And they at least have an expectation.

Speaker 2 (42:33):
Right, they know what they're gonna get. In this case,
she in the buffet case, she had a hard time
figuring out what she might get and then she was
told it.

Speaker 1 (42:40):
Was basically pennies on the dollar.

Speaker 2 (42:45):
And you can only imagine what it's like to lose
your spouse and then find out, oh, by the way,
you're getting screwed over financially too.

Speaker 3 (42:54):
Right, so, right, in this massive amount of wealth that
you have wanted your spouse accumulate over time is now
tied up in this trust that appears at least or
the trust the co trustee is treating as completely discretionary.
And we see problems with discretionary trusts where, for whatever

(43:15):
reason they are created and they exist, they do give,
just as the title entails, a tremendous amount of discretion
to the trustee to either spend or not spend. And
again they keep that principle intact because their commissions are
based on the principle in most cases, so yet another

(43:38):
another incentive to keep that corpus in place and to
take their commissions off that and deprive the beneficiaries of
what they would otherwise be entitled to.

Speaker 2 (43:48):
And it would really be interesting to know, and this
is why you file an accounting proceeding how much of
the two seventy hundred and seventy five million.

Speaker 1 (43:55):
Is cash or investments right property?

Speaker 2 (43:58):
How much of its real property, because then you really know,
and how much of it is the valuation of the
twenty percent marko though, which is right because if there's
not enough cash, then you have to find a way
to create more cash.

Speaker 3 (44:12):
Right, real properties are not necessarily generating any cash, So
you don't know what if there's really an abusive discretion
happening here.

Speaker 2 (44:24):
Or certainly seems like there's an abuse of the free
flow of information anyway, because.

Speaker 3 (44:32):
And beneficiaries, as we know, are entitled to accountings of
trusts at any time. You can get one and then
be okay with it, and then request another one six
months from when you've got one. You're gonna pay for it. Yeah,
you're gonna pay the lawyers and you're filing fees, et cetera.
But beneficiaries of trust should always know that they are

(44:54):
entitled to accountings, right, And that's essentially what she's seeking here,
and I'm sure she'll get at the very least, you'll
get an accounting, yes, and.

Speaker 2 (45:03):
We use the accounting to show what to let us
know whether there's enough to get a trustee removed right, right,
And it's not always a clear answer on that. So
if the truste's done everything that they're supposed to be doing,
we've probably got zero. Right, if they'd taken money for themselves,

(45:24):
they're not following the provisions of the trust some other things,
it's a slam dunk, right, But most of them are
somewhere in the middle, and usually what we're going to
do in a situation like that is negotiate either more
for our client less for them co trustee to manage any.

Speaker 1 (45:48):
Number of things.

Speaker 2 (45:49):
It's hard to say exactly what would happen, But the
accounting gives you a playbook and evidence because it's actually
been produced by the other side, right, so they anything
in it they can't say is not true because they
produced it.

Speaker 3 (46:06):
The numbers often bear out any abuses that might be occurring.
And I think our clients when we tell them, okay,
we're gonna the way we see this is we're gonna
we're gonna compel in accounting, and they often think, well,
all right, that's not that's not really what I'm thinking here.
But bear in mind, in accounting can can very well

(46:26):
lead to a remove removal of a fiduciary exactly because
the numbers will bear out abuses if they are occurring.
In courts have jurisdiction over all of those things. So
I would not be surprised if she commenced this matter
as a mirror accounting. Again, this is in a New
York state. This is how we would proceed in New
York State. But it's it's very similar to you know,

(46:49):
to what we do on a regular basis here.

Speaker 1 (46:51):
That's right.

Speaker 2 (46:52):
So I would just say too, if the guy's getting
the trustees getting one point seven million and she's getting too,
those numbers are too close together, okay, So I would
certainly take that case. So we're getting to the end
of the show here. If you have an estate and
trust litigation matter that you would like some advice about

(47:13):
and maybe to pursue, you certainly can give us a
call at the office.

Speaker 1 (47:16):
It's five. We're not interested in.

Speaker 2 (47:24):
Second guessing any attorney that you have now, but if
you have a matter that might be open and you're
looking for assistance, you give us a call. Just remind
everybody again that we have the barbecue bash coming up
on Thursday, the twenty sixth, and that's a fundraiser for
Living Resources in the Veterans Miracle Center. You can come

(47:44):
get a chicken dinner for thirty bucks. You can eat
it there, take it home, have some party and that
would be great.

Speaker 1 (47:51):
And again you can give.

Speaker 2 (47:52):
Us a call at the office. Thanks, everybody, Have a
good weekend, Have a great weekend.