Lessons Learned: Frank Gifford’s Estate Planning

Dear Clients, Colleagues, and Friends,

So your estate planning is in order. You have a will; every loved one is accounted for; and your estate will be passed on in accordance with your wishes.

Or will it?

The great Frank Gifford died on August 9, 2015. He was 84 years old. He was a football player for the New York Giants, and then a television sports announcer and commentator. He was a resident of Greenwich, Connecticut at his death. He had three marriages, and five children from two of them, one with special needs. His latest marriage was to Kathie Lee with two children, Cody and Cassidy. His estate is estimated to be worth more than $20 million. Gifford left a will dated July 29, 2014.

As we explore the what-if’s in the article below, there are a few teaching moments and lessons learned about estate planning and asset protection afforded by wills, blended families, non-community property law states, tax exemptions, trusts, and trustee powers. For the full article on Frank Gifford’s estate planning by Bruce Steiner from Steve Leimberg’s Estate Planning Newsletter #2361, click here, though highlights and excerpts are found below:

Wills

A will is a public document. As can be seen in the article, every detail of a will becomes public knowledge when a will passes through probate and a court oversees the administration of the will to ensure that the will is valid and the property gets distributed the way the deceased wanted. A will covers any property that is titled in your name when you die. So use a living trust to hold your property and there is no probate required for the assets titled in the name of the trust.

Blended Families

Since Gifford had children from a prior marriage, he had to consider how he wanted to divide his assets among Kathie Lee, the children of his marriage to Kathie Lee, and his children from his first marriage. If Kathie Lee had children from her previous marriage, she may have left them a share of her assets, including what she inherited from Gifford. In that case, Gifford might not have wanted to give Kathie Lee the same degree of control and access over his assets.

Connecticut Estate Plans

In larger estates, the typical estate plan for a married person in Connecticut, where there is only a $2 million estate tax exemption, is to shelter the entire Federal estate tax exclusion amount ($5,430,000) and then to leave the balance of the estate to the spouse, either outright or in a QTIP (Qualified Terminable Interest Property) trust. While that results in the payment of some state estate tax in the first spouse’s estate, it shelters from death taxes the maximum possible amount, together with the income and growth thereon during the spouse’s lifetime from Federal estate and gift tax. A life insurance policy could quite simply cover the state death taxes.

Tax Exemptions

The Federal estate tax exclusion amount of $5,430,000 is indexed for inflation. It is scheduled to increase to $5,450,000 in 2016. There is no tax on transfers between spouses. There is also portability for Federal estate tax purposes, so that if Gifford did not use his entire estate tax exclusion amount, Kathie Lee could get the benefit of the DSUE (deceased spousal unused exclusion) amount. However, the DSUE amount is not indexed for inflation, and there is no portability for the generationskipping transfer (GST) tax or for Connecticut estate tax purposes. But there are various planning options to be considered here.

Trusts and Trustees

A will does not cover property held in joint tenancy or in a trust as property owned in joint tenancy with right of survivorship passes to the survivor by operation of law, and assets owned in a trust are governed by the terms of the trusts. Assets held in a living trust pass outside of probate, so a court does not need to oversee the process and your neighbors, friends, and the public will not get to see what you owned when you died. Unlike a will, which becomes part of the public record, a living trust can remain private. If Gifford wished to keep his affairs private, a trust would have accomplished his goals.

Conclusion: The ultra-affluent family and successful business owner should take the opportunity to review the many options for estate planning. Expert advisors are available to help make the best choices. Annual attorney review of your planning is essential. Please contact us for guidance in pursuing connections to the best-inbreed strategic advisors as well as guidance with comprehensive estate planning and asset and lifestyle protection.

Jeffrey M. Verdon, Esq.

Controlling Your Facebook Digital Legacy

Dear Clients, Colleagues, and Friends,

Twelve years ago, Ellen’s mother passed away after 96 wonderful years of life. She was not the wealthiest of persons, but her life was rich with memories of her children growing up, watching them raise their children, and even getting to know her great-grandchildren. This could not have been more evident than when Ellen went to her mother’s fourth floor New York walk-up to clear out her mother’s belongings, and was met by countless photos of family spanning the decades – they were hanging on the walls, preserved in photo albums with handwritten stories, and in frames on the bedside tables. The pictures were beautiful to behold – and easy to distribute to family or discard if appropriate. But today, as they say, times are different.

While some of today’s photographs and stories are preserved in tangible form, a great deal are digital and make their homes online – on Facebook, Instagram, and the Cloud – not to mention other digital assets, such as emails, a LinkedIn account, and personal websites, which may leave behind a person’s digital legacy for hundreds of years into the future. Social media is new in the grand scheme of time – and while the Uniform Fiduciary Access to Digital Access Act (UFADAA) was approved on July 16, 2014, states and tech companies have been slow to adopt it. But the reality of an online digital legacy remains, and while legislatures figure out ways to handle the issue, some online forums, such as Facebook, have created their own option as a solution for users with a concern for what will happen to their account after they pass away.

By going to the Facebook drop down tab, selecting Settings, Security, and then Legacy Contact, a Facebook account holder can name a person as their Legacy Contact, thereby giving that person permission, and the ability, to manage the decedent’s account after the account holder passes away. The Legacy Contact can pin a post to the decedent’s Timeline, thereby, for example, providing information as to memorial service information; accept or deny friend requests, for instance should a family member request to be a friend after the person passes in order to learn information about memorial proceedings; and can update the decedent’s profile picture. By logging into the Legacy Contact area of Facebook, an account holder can opt to give permission for their Legacy Contact to download a copy of the account user’s posts, photos, videos, and About Me section, or can choose to instruct Facebook to delete their account after Facebook is notified of the person’s passing. If an account is not set to be deleted, it will be Memorialized, with the word Remembering shown next to the person’s name in the profile. Further details and information can be found on Facebook’s website, and we encourage interested Facebook users to take advantage of the easy-to-use planning opportunity provided by Facebook so as to have a say in their own digital legacy.

To discuss this and other digital legacy planning opportunities, please contact our office.

Jeffrey M. Verdon, Esq.

Yes, It Can Happen To You

Dear Clients, Colleagues, and Friends,

Legal Malpractice. It lurks in the darkness, waiting to pounce on naïve, unsuspecting lawyers, and yes, even the great ones too.

These are two of the most terrifying, haunting words, and in abject terror, we shape our entire professional careers to avoid any situation that could lead us into the deep hole of exposure. We agonize over our daily choices as we feel forced to tiptoe around combative clients, race against looming deadlines and unreasonable opposing counsel, research the newest case law updates and determine the judiciousness of being asked to lower our fees yet again.

It’s always in the backs of our minds… that fear of being caught up in something we can’t control, but still we think, “It can’t happen to me.”

Although most of us live in tenuous denial, malpractice lawsuits do happen. And they happen fairly often. An article published by the American Bar Association stated that an estimated 5-6% of all attorneys face legal malpractice claims yearly, with some individual claims of liability reaching over $50M in damages. The ABA also reported that lawyers starting their legal career in private practice today are likely to have between one and three legal malpractice claims during their professional career. That number rises if legal work involves a highrisk practice area. The most common malpractice claims include failure to know and correctly apply the law, planning errors, failure to file documents, conflicts of interest, fraud, clerical errors, tax consequences, and poor client communication, among other types of complaints.

These statistics aren’t simply academic. Recently, several high-profile legal malpractice cases in the news have sobered the legal community. Some cases are so huge that entire firms have imploded, even when only one member of the firm is at fault.

The law firm of Rutter, Hobbs and Davidoff was recently slapped with a $10M jury verdict when a former client claimed the firm committed legal malpractice in drafting a separation agreement between he and his employer. Although only two attorneys were ultimately implicated in the claim, the mid-sized firm quickly dissolved under the huge liability as its other partners and associates jumped ship. In another example, rapper 50 Cent sued his former lawyers at Garvey Schubert Barer for $75M in damages, claiming that their misinformed legal counsel had grave financial consequences that directly led to his bankruptcy.

It’s probably safe to say that not many firms carry professional liability insurance of $75M. What happens to a firm’s assets – and the partners’ assets – when insurance carriers only cover a fraction of the cost of a potential legal malpractice judgment? Can a lawyer do anything to protect against a disastrous legal malpractice claim, justified or not?

As any good lawyer will tell you, it depends. After all, timing is everything. If you “firewall” your assets by performing comprehensive estate planning with asset protection BEFORE a lawsuit occurs, you may be able to protect yourself. If you try to do it AFTER, it’s already too late.

Asset protection planning can help protect businesses and estates against unforeseen lawsuits. First class estate and asset protection planning services are not cheap, but what will the cost be if you do get sued and haven’t installed these legal “firewalls?” Defending a legal malpractice lawsuit could cost more than what it might cost to protect an attorney’s whole business or entire estate for their whole life. And, even better, Uncle Sam could help subsidize the cost through the utilization of the tax code.1 Considering these benefits, coupled with the potential risks of losing it all, an upfront investment in such asset protection planning now seems like a no-brainer in protecting yourself later. For any lawyer practicing today, this is an opportunity for peace of mind and job stability.

Take this moment to consider your own situation. Are your personal and professional assets “firewalled” against unforeseen liabilities? Whether you are seeking to protect business or personal assets, a timely and effectively created asset protection structure to protect against a future unforeseeable liability claim can make recovery beyond your insurance policy limits unlikely and get the case settled early and for far less than not having a structure in place at all.

If your assets are exposed, call us for a consultation to discuss “firewalling” your business or estate with a comprehensive estate or business plan with asset protection. Don’t let time, money or denial come back to haunt you.

Yes, lawsuits can happen to you… but assets can be protected.


1 IRC Section 212(3) permits the fees paid for tax planning to be expensed.