Category: Beneficiary Changes

Librarian’s Estate Plan Includes $4 Million Gift to School


A former University of New Hampshire librarian’s $4 million gift to the school has received considerable attention due to the way the school opted to use the funds. This uproar is a reminder that estate planning is important, especially if you’re particular about the way you want your money used. 11-02-16

This is the message in the article “The Lesson We Can All Learn From the Librarian Who Left a Fortune to His Former Employer.”

Robert Morin, a university librarian for nearly 50 years, gave his entire estate to the school when he died in 2015. He designated that $100,000 go to the library but didn’t say how the remaining money should be spent, according to UNH. The school said it plans to spend $2.5 million of the proceeds on a student career center, and another $1 million on a video scoreboard for the school’s football stadium.

The scoreboard upset some people. They said using 10 times the amount dedicated to the library for a scoreboard goes against Morin’s interests—especially his austere lifestyle—which is the reason he could save such a large sum of money.

Think about the amount of flexibility we have in dictating our wishes when it comes to leaving money to others in our estates. A will or living trust can give instructions to do anything that’s not illegal, so you can put in pretty much anything you want.
Here are a few things to consider when deciding who will receive proceeds from your estate and how much:

Specific Amounts. Use caution when stating specific dollar amounts in your will or trust, especially when coupling charities and family as beneficiaries. An estate can lose value over time, so the $100,000 you want to leave to the Alley Cat Allies can sound terrific when your estate is valued at $1 million. However, if it plummets to $150,000, it will leave little for your family. Instead, use a percentage of the estate instead of a specific dollar amount and add a restriction that the amount is not to exceed a specific dollar amount.

Name Charities as Beneficiaries. Rather than mixing charities and family members in your will, make a charity a beneficiary of a retirement account. The money will then go to the charity tax-free, and, if you want to change which charity receives your donation, you only need to change the beneficiary on your IRA or 401K instead of rewriting your will.

As with most estate-planning issues, it’s smart to speak with a qualified estate planning lawyer instead of trying to do it yourself—especially if you have substantial assets and/or multiple beneficiaries.

Reference: (Sept. 19, 2016) “The Lesson We Can All Learn From the Librarian Who Left a Fortune to His Former Employer”

Children Challenge Pittsburgh Publisher’s Will After Being Left Out

10-13-16Two times in the past four years, the attorney for the late publisher Richard Mellon Scaife unduly influenced the billionaire to change his estate planning documents to disinherit his daughter Jennie Scaife and give assets to newspapers and foundations the lawyer controlled, according to a court petition Scaife’s daughter filed recently.

The Pittsburgh Post-Gazette reported, in “Daughter of Scaife files new petition challenging will,” that Jennie got nothing after her father’s 2014 death because she wasn’t included in his 2013 will or a 2010 codicil. Those changes followed a 2008 will that left her family memorabilia, according to the courts papers filed in Westmoreland County’s Orphans Court Division.

The will changes benefited the Tribune-Review newspapers, the Allegheny Foundation and the Sarah Scaife Foundation. Each of these were controlled in part by attorney H. Yale Gutnick, the petition claims.

As a result, everything from an estimated $1.4 billion to the family knickknacks went to those beneficiaries. Jennie claims that this 2010 change “was all part of a carefully orchestrated plan by Gutnick to prohibit Scaife family members from having the ability to contest Richard Mellon Scaife’s will.”

The amended petition adds allegations to those she first made a year ago and looks to strengthen her case, which was complicated by the 2010 codicil. If a judge disqualifies a will due to undue influence, the assets are distributed according to any prior, legitimate will. If there isn’t an earlier will, it goes to the children.

So, if Jennie is going to successfully recover some of the estate, she’ll have to show she was included in the last will that was free of undue influence. She says that’s the 2008 document.

Jennie argued that during her father’s battle with cancer, Gutnick persuaded him to bequeath nearly everything to the newspapers and foundations, which the attorney directed and which were his big legal clients. She also alleged that her father’s bodyguard guided his hand as he scratched his initials on the 2013 will.

“As a person in a confidential relationship with Mellon Scaife, an alcoholic who suffered from many medical issues, an addiction to medication, and weakened intellect for many years prior to his 2014 death, Gutnick received a substantial benefit under both” the 2013 will and the 2010 codicil, Jennie’s amended petition states.

Gutnick was chairman of the Tribune-Review’s board until January. He was aware that, according to the petition, the newspaper’s losses were in the tens of millions of dollars every year and were likely to increase. Because of this, Jennie said the attorney influenced the publisher to put a large part of his estate into a trust fund to support the newspaper.

Jennie’s petition also noted that the estate paid $100 million in state estate taxes, and hundreds of millions of dollars are said to be owed by the estate for federal estate tax. The petition estimates those taxes at $300 million.

Likewise, the late publisher’s son was left out of his father’s will. However, he didn’t join his sister’s case. Instead, he’s a party in a separate challenge filed by the daughter and son in another county. That case alleges that Gutnick and two other trustees improperly allowed Scaife to drain a family trust fund of $450 million, which was primarily used to support The Tribune-Review.

Reference: Pittsburgh Post-Gazette (July 27, 2016) “Daughter of Scaife files new petition challenging will”

Fred Thompson’s Adult Children Battle Second Wife in Estate Contest

The widow of former U.S. Senator Fred Thompson of Tennessee has asked a probate judge to dismiss a claim filed against his estate by his two adult sons, arguing that their allegations of misconduct are a "gross misrepresentation." 9-21-2016

Nashville’s reports in “Fred Thompson's Widow Asks Judge to Dismiss Estate Claim” that the attorneys for Jeri Thompson filed the motion for summary judgment last week, insisting that she never "conspired" with a prominent Nashville law firm to reconfigure the former senator's estate.

The court documents state that Jeri Thompson, as executor of her husband's estate, made just one change, which was a change to a contingent beneficiary designation on two term life insurance policies. This change had no impact on the rights of the plaintiffs, Jeri argued, because they weren’t primary or contingent beneficiaries of the policies—either before or after the change.

The late Senator Thompson's two adult sons from his first marriage, Tony and Dan, filed their lawsuit last week against Jeri and the estate, alleging that she exercised "undue influence" on Fred in many last-minute changes to the estate. The plaintiffs’ suspicions look to have been aroused by an invoice for $40,000 in legal work conducted on behalf of Thompson's estate in the month prior to his death.

Jeri Thompson’s latest court pleading states that the only change made to the estate planning documents was to add their youngest son, Samuel, as a 50% contingent beneficiary along with his sister, Hayden. Jeri remained the 100% primary beneficiary on the policies, the court motion says. The result of the change was the same: Jeri received 100% of the net death benefit of the policies, just as she would have if the change had never been made, according to the motion.

"Plaintiffs cannot show that they incurred any harm or loss that was cause by any action of Executor," the motion declares.

The motion had attached copies of insurance documents showing those beneficiary changes. These were changes that, according to the lawsuit filed by Fred’s two adult sons, Jeri was previously unwilling to share with them.

Reference: (Nashville TN) (August 8, 2016) “Fred Thompson's Widow Asks Judge to Dismiss Estate Claim”