Michael Carter-Williams Showing what it takes to be
#1 in the League on and off the court
On May 5th, 2014, the National Basketball Association (NBA) announced that Michael Carter-Williams was selected as the recipient of the 2014 Kia Rookie of the Year Award (1). At just 22 years of age and appropriately wearing the number 1 jersey for the Philadelphia 76ers, Carter-Williams is making history in more ways than one. Consider his impressive first season’s numbers: In 70 appearances on the court, he scored an average 16.7 points, 6.3 rebounds and 6.2 assists per game, which means he was at the very top of the rookie ladder (2).
In the history of the NBA, there have only been three rookie players who managed to surpass their peers in terms of scoring, rebounds and assists (2). The first rookie to accomplish this was the legendary Oscar Robertson in 1961, during his first season with the Cincinnati Royals. The second was Alvan Adams in 1976 with the Phoenix Suns. Robertson would later be inducted into the Naismith Basketball Hall of Fame, and Adams’ jersey would be retired by the Suns (3). Carter-Williams certainly seems as if he’s in the right path to great achievement in the NBA.
What we have here is a very smart young man who is choosing responsibility over the temptations of earning more than 99.9% of his peers at an early age. For this reason we want to nominate him as well as a financial role model of the year.
In December 2013, Carter-Williams scored what could be considered a financial triple-double, or at least a slam-dunk by infamously announcing his estate planning prowess. CBS Sports reported that the young rookie agreed to put his salary from the 76ers into a trust managed by his mother and a close family friend who is a financial planner (4). At this point, Carter-Williams is earning a guaranteed $4.5 million for this season and the next. He is clearly earning his salary: On the 76ers opening game this season, Carter-Williams scored a jaw-dropping 22 points, caught 7 rebounds and passed 12 assists to beat the Miami Heat, the reigning NBA champions (5).
Under the terms of the trust according to CBS Sports, Carter-Williams cannot touch his salary, which could increase considerably after his second season, for three years. This does not mean that he has to depend on his family to get by; CBS Sports went on to state that he is making money from his endorsement contracts signed with sporting goods giant Nike and Panini America trading cards (4). Now that he has earned Rookie of the Year, his endorsement deals are bound to become even more lucrative.
“What we have here is a very smart young man who is choosing responsibility over the temptations of earning more than 99.9% of his peers at an early age. For this reason we want to nominate him as well as a financial role model of the year,” explains Rocco Beatrice of UltraTrust.com, a website that provides asset management tools such as irrevocable trusts, FLP’s, and LLC’s. UltraTrust.com is owned by Estate Street Partners LLC, a firm that provides estate planning and financial advice. “The painful subject of professional athletes facing bankruptcy and ending up broke is becoming far too common these days. Let’s not forget about the last player from the Sixers who had the honor of being named Rookie of the Year.”
Mr. Beatrice is referring to Allen Ezail Iverson, also known as “The Answer.” Iverson was the 1997 NBA Rookie of the Year; he had a great career with the Philadelphia 76ers and essentially changed the face of the NBA with colorful and questionable behavior on and off the court. Iverson, whose jersey was retired by the Sixers, reportedly earned $200 million during his career (6); however, according to Forbes, he was often broke or on the brink of filing for bankruptcy even while still playing under contract for NBA teams.
“A lot can happen to athletes who are not careful with their money. Players such as Iverson, who come from disadvantaged backgrounds, are often thrust into a world that is completely foreign to them when they start playing at the professional level. They turn into profligate spenders with big hearts who give a lot of money to family members and neighborhood friends; then their income becomes accosted from all angles by a motley crew. We are talking about dishonest agents, dubious financial planners, gold digger spouses, sham business people, and assorted hangers-on.” At this point, Mr. Beatrice calls attention to a 2009 Sports Illustrated article by Pablo S. Torre (7), which was an eye opener into “How (and Why) Athletes Go Broke.”
Mr. Beatrice continues: “Over the last few years we have learned of so many professional athletes going broke. Besides Iverson in the NBA, we know of Latrell Sprewell, Antoine Walker and many others. It’s not just men; let’s remember Sheryl Swoopes of the WNBA, who declared bankruptcy despite earning $50 million in salaries and Nike endorsements. For this reason, it is truly great to see Carter-Williams setting an important example.”
As to the type of trust selected by Carter-Williams, Mr. Beatrice explains: “The news reports do not specify too many details about the irrevocable trust; however, this is the type of we recommend to professional athletes for many reasons. First of all, many rookies are surprised by a wave of frivolous lawsuits and hands out as soon as they receive their first paycheck. These lawsuits are typically filed by unscrupulous people who seem materialize out of nowhere to attempt a shakedown. Let these sham plaintiffs know that earnings are deposited into an irrevocable trust and they won’t bother again. The same goes for gold diggers.”
“Looking at the news reports, it seems as if Carter-Williams plans to follow this initial strategy for a few years. You never know what the future may hold, and career-ending injuries are always lurking in the field of professional sports,” concludes Mr. Beatrice. “Irrevocable trusts are also ideal for retirement and estate planning, to reduce tax liabilities and to avoid financial distress in general.”
Famed Artist, Robert Rauschenberg, is A
Contender for the Oh My Gosh Award in 2014
The question at the heart of In Re: The Estate of Robert Rauschenberg, Case No. 08-CP-002479, in the 20th Judicial Circuit of Florida, Lee County Probate Court is friends in need or friends in deed? This probate administration case eventually ramified into a civil action in the Sunshine State. The contentious issue is whether the trustees in this case are entitled to the $60 million they consider to be reasonable estate administration fees.
According to Guggenheim Museum, Robert Rauschenberg was a very important figure in the school of Pop Art. A true American master, Rauschenberg will forever be remembered through the important body of work he left behind (1), the significant influence he made on the 20th century art world, his philanthropic legacy, his enormous heart, his effusive charisma, and just for being an all-around nice guy.
Customary trustee fees can be freely discussed. In many cases, the customary fees do not exceed one percent of the total value of the estate, but they can be set according to the work that the trustees can actually perform.
According to Jerry Saltz at Artnet, to get an idea of Rauschenberg’s artistic caliber, it helps to note that he was a recipient of the National Medal of Arts and the Leonardo da Vinci World Award of Arts. He was born in Port Arthur, Texas and would later serve as a Hospital Corpsman in the United States Navy. He studied the arts in the 1950s, and by the 1960s his works of visual art were heralding the Pop Art school in the United States.
He lived and worked in New York, where he produced collages, paintings, photographs, innovative sculptures, stage sets, costumes, music albums, and more. Rauschenberg also founded an important artistic and cultural international exchange program that promoted peace and goodwill (1). He has been equated to “an American Picasso.” (2)
In 2003, Rauschenberg moved to Captiva Island in Southwest Florida. He had established the distinguished Robert Rauschenberg Foundation a decade earlier, which is dedicated to philanthropy and humanitarian endeavors (3). He sadly passed away in 2008 after a bout with heart failure. According to the New York Times, Rauschenberg entrusted three of his close friends to handle his sizable estate and administer the Robert Rauschenberg Foundation (4).
The trustee friends in question are Bill Goldston, Bennet Grutman and Darryl Pottorf (5). Rauschenberg had every reason to trust them with his estate; after all, Goldston is a long-time business partner, Grutman a long-time accountant and Pottorf his long-time partner and confidant. The bulk of the Rauschenberg estate consists of extremely valuable works of art and choice real estate. The last will and testament of the artist was clear in the sense that he wished to preserve the good work of the Robert Rauschenberg Foundation, which in 2012 was valued at more than $2 billion (4).
In 2013, the three friends asked the Robert Rauschenberg Foundation for $60 million in trustee fees. The foundation’s attorneys balked and lawsuits ensued. A hearing is currently scheduled for late March, and it is expected that this case will go to trial (5). The foundation is opposed to disbursing such trustee fees on the basis that they amount to exorbitant hourly fees of about $40,000. Media reports indicate that the trustees have not kept meticulous records that could back up their claims; yet, the Lee County probate court docket indicates that several interrogatories, motions, responses, and depositions have taken place since 2011.
“We are looking at a possible estate planning issue with regard to fair and reasonable trustee compensation,” explains Rocco Beatrice, Managing Director of Estate Street Partners, LLC, parent company of the UltraTrust.com, where individuals can find valuable advice related to estate planning. “Here we turn to the Florida Trust Code for guidance (6), which tacitly explains that trustees are entitled to reasonable compensation. That’s pretty much the extent of it, and it leaves the door open for probate litigation in the absence of a solid trust instrument that clearly sets the basis and form of trustee compensation as well as the amount.”
“Florida courts certainly have jurisdiction to determine reasonable trustee fees.” States Mr. Beatrice To this effect, West Coast Hospital Association v. Florida National Bank 100 So.2d 807 (1958) often comes to mind (7). That case establishes numerous factors that can be considered by the court for the purpose of determining reasonable trustee fees. The problem is that the factors are not all-inclusive and may be challenged, thereby extending litigation and depleting the estate with prolonged legal fees.
“When it comes to estate planning, proper construction of a trust or will is of the utmost importance,” assures Mr. Beatrice. “At UltraTrust.com we work closely with our clients to ensure that their wealth is preserved to the maximum by the instrument they choose. Customary trustee fees can be freely discussed. In many cases, the customary fees do not exceed one percent of the total value of the estate, but they can be set according to the work that the trustees can actually perform.”
The New York Times explained that a legal expert retained by the foundation determined that reasonable trustee fees in the Rauschenberg estate dispute could be considered reasonable at about $250 per hour, and that the $40,000 per hour claimed by the three friends could be considered unconscionable (4). In this case, the grantor or trustor should have moved to establish a fee agreement between the trustees and the foundation based on their abilities and the amount of work that could be foreseen at the time.
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Kurt Cobain’s Daughter’s Irrevocable Trust
Inadvertently Caused Courtney Love to Change
the Life of all Twitter Users Forever
As expected, Courtney Love took to Twitter to announce the outcome of Gordon & Holmes v. Courtney Love, BC462438, in the Superior Court of the State of California for the County of Los Angeles. “We won this epic battle” was part of the message sent by the musician, actress, and colorful Hollywood personality to more than 250,000 followers. (1)
The grunge rocker also tweeted a selfie, a digital self-portrait, which showed her staring straight at the camera while a bumper sticker covered her mouth: “Think Beyond!” The case gained significant attention since it is believed to have been the first jury trial involving the intersection of Tweeter and libel. According to the Poynter Institute of journalism education and advocacy, it took jurors seven days and a couple of hours of deliberation to rule in favor of Love. (1, 2)
This case goes beyond potentially libelous speech online. There is the Kurt Cobain estate to consider as well.
NBC News called the trial a “Twibel” case. ” (3) This case goes beyond potentially libelous speech online,” explains Rocco Beatrice, Managing Director of Estate Street Partners, LLC, parent company of the UltraTrust.com website which offers advanced and valuable estate planning tips. “There is the Kurt Cobain estate to consider as well.”
According to the court documents, (7) it has been nearly twenty years since Cobain, lead singer of legendary grunge band Nirvana, sadly took his own life near Seattle. Cobain did not leave a will, and thus the case was handled under the intestacy rules and statutes of the Revised Code of Washington State. Years after his death, his surviving relatives established an irrevocable trust for the benefit of Frances Bean, Love and Cobain’s only daughter. According to The Guardian, Love was an active manager of the Frances Bean Cobain Trust Fund despite losing guardianship of her daughter in 2003 and 2009. (6)
“Family quarrels do not preclude trust management duties,” explains Mr. Beatrice. “Unless a clause in the trust agreement specifies that administrators must also be legal guardians, Love retained her authority with regard to reviewing trust disbursements and expenses.”
In fact, Love’s authority over the Frances Bean Cobain Trust Fund is at the very heart of this Twibel case. According to NBC News, the plaintiff is a San Diego law firm retained by Love in 2008 to handle a matter related to alleged fraudulent mismanagement of the Kurt Cobain estate. (3) Two years later, however, the attorney-client relationship had soured and turned into a plaintiff-defendant legal battle.
In 2010, Love made an unusual decision: She turned to Twitter for legal advice. According to MyNorthwest.com, Love recruited a small Twitter army of online investigators who allegedly helped her uncover malfeasance in the management of her daughter’s trust fund. Love actually praised Twitter as an online social platform for gathering evidence. (5)
NBC News also reported on the single Twitter update that set off the Twibel complaint by the law firm Gordon & Holmes. During a Twitter exchange with bloggers, Love expressed dismay at her alleged abandonment by California attorney Rhonda J Holmes. Ms. Holmes claims that Love was a challenging and unresponsive client, but that she never betrayed her duties as counsel. (3)
According to the court documents, the plaintiffs introduced more evidence than the sole tweet to make their defamation case against Love. UltraTrust.com has examined court documents in this case that the grunge rocker moved to exclude from the trials, particularly a 2013 interview given by Love to the Howard Stern Show. In that interview, the defendant Love spoke about her past issues with using Twitter in an unhinged fashion, which ended up in expensive defamation cases that she chose to settle. (9)
According to the documents, Love discussed a lot more than potentially libelous remarks on her Howard Stern interview. She mentioned details about how the structure of the Nirvana and Cobain estate and how her daughter’s trust fund ties in. (9) “Unlike wills, trust instruments are constructed in such a way that they are kept confidential,” explains Mr. Beatrice. “The Howard Stern interview shows that Love was not careful with regard to keeping trust matter confidential, but she has also stated in interviews that she is learning from her mistakes.”
The Twibel case has given UltraTrust.com an opportunity to review other interesting details surrounding the Cobain estate and her daughter’s trust fund. In 2012, for example, according to the Guardian, Love ceded the controlling rights to the late Cobain’s public image to Frances Bean. This took place two years after Love relinquished her duties as manager of her late husband’s name and public image in exchange for a $2.75 million loan taken from the Frances Bean trust.
According to Mr. Beatrice, “Borrowing from trust is not an unusual matter, but it should not be handled without the advice of a trust management firm or an attorney. The repayment methods and terms must be discussed, and there may be fees to consider as well.”
The LA Times reported that the jury did not find the plaintiff’s evidence convincing enough insofar as determining whether Love knew that she was defaming her former attorney. (7) Based on this analysis, the jury cannot prove that Love sullied the reputation of the plaintiff. In fact, an attorney for the plaintiffs explained that media attention in this case has actually boosted her client’s reputation as a lawyer.
Assets can be protected from frivolous lawsuits while eliminating your estate taxes and probate, and also ensuring superior Medicaid asset protection for both parents and children with their Premium UltraTrust® Irrevocable Trust. Call today at (888) 938-5872.