In this podcast, we go over some scary stories about people who did not write a will.
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This video was recorded on Oct. 19, 2022.
David Gardner: The foulest stench is in the air, the funk of 40,000 years and grisly ghouls from every tomb closing in to seal your doom. Though you fight to stay alive, your body starts to shiver for no mere mortal can resist the evil of the thriller. Well, I'm not even going to try to imitate Vincent Price's thrilling, chilling rap at the end of Michael Jackson's iconic song. But just as Michael's team gave Vincent a role to play in his work, we're going to give Michael a role to play in our work this week because along with my pal guest star and longtime Fool Robert Brokamp, we're going to tell some scary stories focusing on people who didn't do their wills on this week's podcasts, 7 of them, in fact, one of them is a chapter featuring Michael Jackson. Robert is here to scare you and me. This scary time of year scare you into making sure you get that family will done. Maybe it's yours you need to do or maybe it's your parents because scary things can and will do happen when you don't tie a bow around your financial life. The evil of the thriller, indeed, only on this week's Rule Breaker Investing.
Welcome back to Rule Breaker Investing. It was a mailbag item earlier this year, Fergus Colin, a longtime Fool and friend of mine, Fergus, you wrote in a heartbreaking story on our mailbag about a young man, I think it was in high school and his father had tragically died in recent weeks, and instead of being able to fully to process and to mourn for his father, which I hope he did, he also had to take over all of the estate management decisions because his father, who was an entrepreneur, I believe, had his own business. His father didn't have a will, and so this young man grew up awfully quickly. He had to. It's not an easy thing for any of us at any stage of our lives. But especially think of that young person. I remember having Robert Brokamp join me on Rule Breaker Investing that week to speak to the mailbag item. Then afterwards Bro, dropping unknown, He said, you know, I've got some scary stories about people who didn't do there will, and I thought, parking, hold off, wait for October.
Come back on this podcast and let's share those stories and that's exactly what we're doing this week. Now some of these stories are about really well-known people and some are about people that you haven't heard of before, but all of them touch us personally. You might find yourself spoken to her touched for better or for worse at one or another point during this week's podcasts. I want you to know, we're all human. We're all doing the best we can. I bet a lot of us have a story, a tip, perspective, maybe advice, which is most welcomed the scary month of October because next week's show is the Rule Breaker Investing mailbag. I'm quite sure a number of you have additional, again, wisdom advice stories, or perspective that you'll find spoken to or will arise from this week's podcast.
I think it'd be great to speak to that somewhat in next week's show. The Rule Breaker Investing mailbag is next week. RBI at fool.com, of course, our email address drop us a note. You can also follow us on Twitter @RBIpodcast. Now if you haven't already, I hope you'll subscribe to this podcast on iTunes or Spotify, or Google Play, wherever you listen to podcasts, you can follow us on Twitter. I already mentioned @RBIpodcast, I'm @DavidGFool on Twitter. My guest star this week is @RobertBrokamp, that's with a K. Brokamp on Twitter. Finally, we hope you'll give us a review, throw me some stars, let us know how we're doing. I read every comment. Robert Brokamp, welcome back to Rule Breaker Investing and delighted to see you on this scary week.
Robert Brokamp: Thanks for having me back, David. I am very happy to be here, even though the topic we're going to discuss, it's not necessarily a happy topic.
David Gardner: It is not and yet, I think that October it's a safe space for us to tell horrific and scary things.
Robert Brokamp: Totally agree.
David Gardner: You have brought them, you've brought seven stories and a few of these I know but many I don't. I'm like the rest of our listeners pulling up to what normally would be a warm and hospitable campfire. But this time, it's terrifying. It's growing more than burning. It's a little spooky here. I want to define one of our terms right up front because this is not a word I walk around using all the time. Of course, those in the trade, and Robert, you would be one of them might use the word decedent on a semi-regular basis. But most of the rest of us, especially some of our English is not your first language listeners decedent. Very simply, this is from dictionary.com, a person who has died.
Robert Brokamp: It's very simple. We're not going to be talking about state planning, which is very legalistic. A decedent is essentially a very legalistic term for someone who died.
David Gardner: Before we get deeper into death, Robert, a topic that keeps her occurring on this podcast this year. Let me just ask you, have you done your own will?
Robert Brokamp: I have. I will say that when I was younger, I just did a regular old online will, which is probably fine if you are not married, don't have kids, your finances are not complicated. More recently, I've done a full-fledged estate plan with a qualified attorney, which is what I think most people really should do. That includes a will, includes the trust, includes healthcare directives, includes instructions on what my wife and I want to happen in case we're being kept alive by artificial machines or anything like that. It also includes a whole list of where to find anything anyone would need to find if we pass away. Where are our life insurance policies? Where are our bank accounts? Where do we have all that stuff? One sister as an executor and another sister is the backup executor and they know exactly where to find this stuff if something happens to me and my wife.
David Gardner: That is great. I have also done my will, I don't think either of us is bragging about that, but I do feel as if Robert, we should be exemplars somewhat. I mean, if we're going to talk the talk here, we should be walking the walk, especially you by the way. I'm glad you've done this where I also with my wife, have used an attorney. We're hoping not to be decedent for some time. Yet one never knows. That's an underlying story that underlies each of the seven scary stories we're going to share this week on Rule Breaker Investing. Well, I say without further ado, let's get started, Bro. You've named each one of these campy names appropriately enough. I'm going to ask my talented producer Rick, to play a scary intro sound to get us in the mood here for Chapter 1.
Robert Brokamp: Now, the decedent in this case, as you might guess, is Prince Rogers Nelson, of course, better known by his first name Prince, who died in 2016 from a fentanyl overdose, and yes, Prince was his first name. He got it from his father, who was a jazz musician, stage name of Prince Rogers. Andy decide to pass along to his son when Prince was born 1958. Now, Prince has gone, not forgotten. Paisley Park, that 65,000 square-foot complex, it served us Prince's home office studio. You can go visit as a museum. If you visited on the five-year anniversary of his death, you could have viewed a small model of Paisley Park that serves as the earned for Prince's Ashes.
What was the mistake that Prince made? Well, he didn't do any estate planning whatsoever. No will, no trusts, no note scrawled out in purple ink. He wasn't married, didn't have any living children, so his one full sibling and five half-siblings filed claims to the estate, but hundreds of others came out of the woodwork claiming that they're also Prince's, half siblings or wives or business partners or even children, including a guy who is an inmate in a Colorado jail, who said his mom had a one night stand with Prince in 1976.
David Gardner: Oh my gosh.
Robert Brokamp: Eventually, a DNA test proved that he wasn't Prince's son.
David Gardner: Let me ask you about this, but first of all, do we know the size of the estate today?
Robert Brokamp: Yes. This was just determined two months ago, so again he died in 2016, it was finally valued at $156 million.
David Gardner: Do you think that he had any idea himself, the size of his fortunate at the time?
Robert Brokamp: Well, so here's the difficult thing. This is why it took so long because not only did he have property, real estate, stocks, bonds, and stuff like that, but he had his music catalog including some songs that had not been yet released. It took a long time to value those, but even to access them, because to actually access some of these masters, the bank that was eventually declared to be the administrator had to drill into his vault because he was the only person with the combination, which gets back to how you need to leave important information to the people who will be your executor administrator because otherwise, they won't be able to access some of this stuff.
David Gardner: Well, for each of these seven stories, Robert, you, and I talked about this ahead of time. I think you'll be leading off with the decedent, a very well-known one in this case as you already have Section 2, I think you just spoke that is the mistake and clearly this was complex in the first place. I mean, when you're an artist and you have the capability of creating value, i.e. and unreleased song. No one really knows how to value that, so how could you even know fully what you have? But clearly, it wasn't Prince's job I don't think to value his zone estate it was his job to think about it and to think about what he wanted to do with it. Three, 2, 1, go and to think about what he wanted to do with it. Well, his untimely death obviously through things.
Robert Brokamp: Three, 2, 1 go.
David Gardner: His untimely death obviously made for a very difficult time for his family, all of his fans, etc. But here we are, five years later, six years later picking up the pieces a little bit, if we're his estate team for each of these, Robert, you've said you're going to bring a lesson, and I love that. Thank you. For each of our seven scary stories, there's the lesson, perhaps more than one for some of these but what is the lesson of the ghost of Paisley Park?
Robert Brokamp: Well, it's really the most fundamental asset, which is you've got to do some estate planning and it's really quite shocking how many people die without doing anything. We're talking about people like Abraham Lincoln, Jimi Hendrix, Martin Luther King, Sonny Bono, Picasso, Buddy Holly, just to name a few, all these people died without doing anything, even a basic will, without a well a trust and all these other documents, the courts decide who gets what. It's going to take a long time, cost a lot of money. It took more than a year after Prince's death for a core to name his six siblings. As I just mentioned, it was just this year that the estate was finally valued.
The six siblings that were named as the heirs, two of them have died since Prince died, so they weren't even enabled really to benefit from the estate. In the case of Prince's music, he had very definite ideas about what he wanted to do with his music. He did not put his music on Spotify, for example, but once he passed away, is the state was able to put that on there. Did he want that to happen? Does he want his music on Spotify? Doesn't matter because he didn't put down his wishes in writing, which he should've done before he passed away. I mean he was only 57. That was very young and I think that's one of the mistakes everyone makes as they think, well, I've got plenty of time, but you just don't know how much time you have.
David Gardner: I was going to say I think that that would have to be the number 1 factor. I mean, we're not saying that people who've not filled out there, we'll who should have don't love those who come after them as much as those who do. Maybe in some cases, they do, but that's not what we're saying. I think what we're saying is it's not even that didn't think they'd ever die, it's just they didn't think it would happen when it did.
Robert Brokamp: Yes.
David Gardner: They did it, they weren't prepared and so fundamentally, I loved that you let off with the ghost of Paisley Park lesson number 1, I don't know if there's a progression in the lessons, Robert, you can tell us, we'll find out, is there more complexity? Are we going in a certain direction? But this is a great one to start with because it's just about doing the work, putting in the work.
Robert Brokamp: Yes. I think as we go through, we'll get into this more deeper details about what makes for a solid estate plan.
David Gardner: By the way, for those who have a simple financial life, they may not have a lot to give right now or a lot of people to work with. What's the URL or site or length that you would recommend if I just wanted to do some quick and dirty because I'm a responsible 28-year-old hearing this right now, feel like I should do that? Does The Motley Fool have a given partner? Do you have a specific recommendation? Is it wills.com? I went through an attorney, so I don't know, but there are a lot of us who are good at rolling up our sleeves and doing stuff ourselves among our full membership. Where should I report for duty at the age of 28 if I just want to do it well and fast?
Robert Brokamp: My favorite website for anything about legal matters is no law.com and no law home is a good resource for getting some of these legal documents done. On your own. Many employers offer some legal aid or an employee assistance program and part of that can be a free will or access to will-creating software, so that's a good start. But in the end, most people should get qualified legal advice from an attorney who's experienced in estate planning. Many attorneys will say, Yes, I'm going to turn it. I can write a will, but you really want someone who has experience working with someone in your situation around your wealth level, maybe you own businesses, so you want to work with attorneys experienced with businesses.
David Gardner: Yeah.
Robert Brokamp: Real estate, things like that.
David Gardner: The more you have, the more matters, and typically the older we get, the more we have, so choose your own adventure, dear listener, let's move on to scary story number 2. Robert, you've entitled this one A Tale of Tractor Terror.
Robert Brokamp: The decedent, in this case, was named Cecil George Harris. So he was a farmer in Saskatchewan. He rode out into his fields one day, 1948, at one point he climbed down from his track to do some maintenance. Unfortunately, he accidentally knocked the tractor into gear and got pinned underneath. He was found hours later he was still alive, but unfortunately, he died the next day at the hospital.
David Gardner: That is scary and that is our decedent.
Robert Brokamp: That is our decedent. What was the mistake he made but he actually rectified it at the last minute, he didn't have a will or so people thought. After Cecil's death, neighbors noticed that there were some words crawled into the bumper of his tractor and they read, "In case I die in this mess, I leave all to the wife, signed Cecil George Harris."
David Gardner: What?
Robert Brokamp: The court actually accepted it as a valid will. However, because wills have to be filed with the court, Defender had to be removed and kept in the courthouse and in 1996, it was donated to the University of Saskatchewan College of Law for public display, where it's still there.
David Gardner: That is an awesome story. Oh, my gosh, what a hero.
Robert Brokamp: Yes, and actually I looked this up. According to the Guinness book of world records, it's not the shortest will ever. The shortest will ever was written by a fellow in Germany. It's two check words and I'm not going to even try to pronounce them, but it means leave all to the wife, and he wrote it on the wall next to his bed as he realized he was about to pass away.
David Gardner: Wow. Well, a lot of us can maybe guess at a lesson or two, but Robert, what lesson do you see most clearly in the story of Cecil George Harris?
Robert Brokamp: Well, obviously his quick thinking spared his family some difficulties that came from dying without a will at all, because again, if you don't have the will, the state decides what happens to everything you own. But obviously, we shouldn't rely on that. We can't rely on being able to know the end is near. You got to get the will but as I've pointed out, it should include other things. I think one of the things people have trouble making decisions about for example, and I don't know if it was the case of Cecil's situation, but you need to think about what's going to happen to your kids and the assets they're going to inherit. Part of a good estate plan is naming guardians for your kids and then who will manage their money until they become adults when they can manage the money on their own. It is much more complex than just a will.
David Gardner: Well, it is the baseball time of year, I do want to say before we proceed to story number 3, which looks to me like it has a baseball title. I really regret that the Los Angeles Dodgers got knocked out of the post-season by the San Diego Padres just a few days ago. You know the dodgers were by far the best team in the major leagues this year. Their run differentials were awesome. No matter who is still playing at the end of October, no matter who is the champion, I will still feel that the dodgers were the best team and majorly baseball this year. And I think it's particularly sad when that small sample size of post-season games, and this happens across all sports. You only get to play a few in the playoffs, tiny compared to the body of work that the dodgers had all season long, and yet the dodgers have to watch along with the rest of us who gets to win in October. Enough baseball asides, Chapter 3 is entitled the Headless Slugger.
Robert Brokamp: Yes, in this case, the decedent is hall-fame baseball player Ted Williams, who died in 2002 at the age of 83. He had a will which stipulated that he wanted to be cremated and his ashes scattered off the Coast of Florida. But that ended up not being the final word on what would happen to his earthly remains. Here's the mistake, so Williams had three kids from two marriages. After his death, the two younger kids produced a stained napkin allegedly signed by the two kids and Williams with a note indicating they agreed to be "Put in bio stasis after we die." In other words, cryogenically frozen. Now the older daughter disputed the note and tried to fight it in court, but William's signature on the napkin was authenticated to be genuine, and eventually, the older daughter just ran out of money and she couldn't contest it. Williams body was packed into ice and set to a cryogenics company in Florida.
David Gardner: Amazing.
Robert Brokamp: His head was separated from his body and the two parts are now stored in metal tanks, and then two years later, Williams was joined by son who died of leukemia.
David Gardner: There was a wonderful short story written by John Updike about Ted Williams's final at that I think it was called Hub Fans Bid Kid Adieu. Spoiler alert, pretty sure he hits a home-run in his final appearance at Fenway Park to end his career and he wasn't Prince, he was responsibly had a will and yet still, appropriately enough, you've entitled this the Headless Slugger, and I think we can all appreciate why. I'm not really sure what you're going to do with lesson here. What is the lesson, Bro?
Robert Brokamp: Well, the lesson is, it's quite possible that Williams genuinely wished to have his remained stored at 320 degrees below zero in perpetuity. But there are questions about the legitimacy of the cryogenics note. One theory is that it started out just as an autograph and then the two kids wrote the rest of the note around it because he signed that napkin as Ted as it did for all his autographs, but not as Theodore which is how he usually signed his legal documents. But regardless, if he wanted to make a more official change to his will, he should have done it with the help of a lawyer, either by redoing it completely or adding a legally binding amendment note as a codicil. It would have saved his kids a lot of money and a lot of grief.
David Gardner: I'm thinking back to a few years ago on this podcast, we had Amy Castoro joining. She is the author of a book, well the first edition was called Preparing Heirs. She is a professional in this space and one of the lessons we all learned from Amy is as much as possible, talk some of this stuff out with your kids. Don't surprise everybody. That's always the Hollywood scene. We're going to go into the den because Gramps has died and we're going to have the dramatic reading of the will, and everyone's going to be shocked because something surprising is going to happen. That's Hollywood. It's pretty much the opposite of how it probably should be in real life.
I think I also hear the lesson here, Bro, maybe Ted has a talk with all of the kids where there's more awareness shared down well in advance of we're going to go with deceding, well in advance of deceding probably not an accurate verb. Have those conversations with the people who will be affected and if possible, make them included in some of the solutions. Maybe you have a good idea about where you want to put the money, but maybe once you talk about it with your adult kids, they say, yeah dad or mom, but what about this? Because that would really energize us. I think the more it's a whole family decision with better communication, Amy Castoro reminded us, I think the better the outcomes. I hear that one in the Headless Slugger as well. Robert, are you a baseball fan?
Robert Brokamp: Actually I'm not much of a baseball fan.
David Gardner: We've worked together for more than 20 years at the Fool, I don't think we've ever really talked baseball. I apologize for that distracting aside about the Los Angeles Dodgers. You and perhaps many of my listeners probably didn't really care. Let's go on to story number 4. I feel as if I could almost guess what Rick might do with the sound effects for Chapter 4, The Alien Who Loved Me.
Robert Brokamp: I guess in this case, we're talking about Robin Williams, who first attained worldwide fame is the goofball mork from the planet Ork. He died in 2014 while living with this third wife, Susan Schneider William. He actually had a pretty solid estate plan, that left most of his wealth to his three kids from previous marriages. But his plan also stipulated, that his wife would be able to live in their home, that they shared, and receive money to pay for its maintenance. Once she passes away, it will then go to his three kids. That's a pretty common arrangement. The mistake was that Williams' estate plan wasn't sufficiently specific about what would happen to everything in the home, which was a cause of contention between the wife and the children.
They probably fought over all kinds of items, including furniture, artwork, even clothing such as Williams' slippers, and reportedly even his underwear. The dispute essentially centered on one question, what counts as Robin Williams' memorabilia that should go to the kids such as his Mork suspenders, and what are sentimental items that his wife could keep. What happened more than a year after Williams' death, his wife and the kids settled the dispute. The terms are confidential, but in a statement, lawyers for Susan Williams said that Mrs. Williams will be able to keep the few emotional items she requested, such as their wedding gifts like the clothings, a watch that Robin Williams wore, and that the Williams children will receive the vast majority of the items they demand, such as more than 50 bikes, I don't know why he needed 50 bikes, over 85 watches, and also apparently Robin Williams had extensive collections of things like comic books and army men.
David Gardner: Well, he was a cool guy, I assume your a Robin Williams fan, who's not a Robin Williams fan?
Robert Brokamp: Absolutely.
David Gardner: You know, if you're somebody that well-known and that famous, I can understand, there's got to be a lot more complexity for someone like Robin Williams than for you or for me, and I won't put a pass our listeners. We have some amazing and fascinating listeners, but I think most of us, have a much simpler life and a simpler plan. Very few things most of us have, might be considered or not memorabilia. How do you even categorize something like that? I guess the lawyers know.
Robert Brokamp: Yes. It really did come down to questions about what that word meant, that actual word, does memorabilia just relate to anything that was related to his entertainment career? Or do sentimental things like pictures count as memorabilia. That's really what the fight was about.
David Gardner: The Latin for the word memorabilia is straight up, things to be remembered. You don't even have to skate very far away from the eyes of the etymology of the word. But then again, it's ambiguous, objects that are connected to or remind us of past events I guess, or things to be remembered. There is a lot of complexities, sometimes common words end up being legalized and sometimes have specialized meanings. What's the lesson?
Robert Brokamp: The lesson here is that when people think of a state plan, they often think like, "Who's going to inherit my house? Who's going to inherit my car? Who's going to inherit my IRA." But really some of the biggest fights come down to inheriting stuff that may not have a lot of financial value, but have a lot of sentimental value. Heirlooms, collections, stuff that used to belong to grandma or grandpa, the Christmas tree. The thing to do here, and it's related to what you said previously, is if you can have a discussion with your kids or other heirs beforehand, what do you want to receive? What of my stuff has a lot of sentimental value to you? Be as specific as possible in your estate plan of who's going to inherit what, and a system by which all that stuff will be distributed. Because if the kids can't agree, what often happens is then it has to be sold, and then the money is distributed, and so what used to be maybe a family heirloom that could've stayed in the family, gets forced to be sold and now nobody gets it.
David Gardner: It's really an important point. Things like IRAs, these are very numerical. They have account numbers. These are things that are fairly easy to line up. But wow, that conversation about mementos and memorabilia, and what do we value, that almost feels to me like a good inroad. If you have an older parent, and this is a touchy subject, you could almost start rather than say, hey mom or dad, do you have a will, maybe you could start with, hey, mom or dad, I was thinking about what are the five things that mean the most to you on this world? And I'm thinking not your IRA, but your favorite old pair of shoes. You never really know what mom or dad or gramps is going to be valuing, but that's not a bad way to start the conversation. Robert, I was reading back through Marie Kondo's book recently, The Life-Changing Magic of Tidying Up. Did you ever read The KonMari Method Book?
Robert Brokamp: Of course. I think we even did a podcast on how to Marie Kondo your money, but yes.
David Gardner: I love that you did that on Motley Fool Answers. Maybe I heard that. I did go back and read the book recently, and she actually talks about when cleaning things out, the very last thing she wants you to have to think about, emptying your closet of, are those mementos and your memorabilia. She's like start with clothing, start with stuff that's easy to toss. Not memorabilia clothing of course, but books. Again, we love our close, we love our books, but the things that we have a particular affection for because they mark at time in our lives, or they were the last thing we have from mom. Those things, she says, make decisions last, because you will have strengthened your mind and your resolve around getting rid of clothing or books, but that mementos and memorabilia piece along with Robin Williams, who you could almost argue anything that he touched in his last year becomes memorabilia. It's much more complex for him anyway.
I'm glad that we had this brief meditation on the power of things, because I think a lot of us recognize that we don't want to be too materialistic, and often, I've heard people say, a better idea for gift-giving, is giving experiences. That's almost a cliche these days. Don't give stuff. But let's go back on the side of stuff briefly, and say stuff does matter. That's a key lesson here in The Alien Who Loved Me. Thank you for Chapter 4. Robert, before we move on to Chapter 5, how can I not bring this up? You are a champion Halloween costume genius. I'm not going to brag too much in your behalf, Robert, but you have been featured, for one of the outfits you had at The Motley Fool headquarters some years ago in the Washington Post, in their story, The Day after Halloween. This is legend, the stuff of Bro around Fool HQ. Now I know not as many of us are going to offices these days, are you still dressing up this year?
Robert Brokamp: That's a good question. It really depends on what the Fool does. As you know, we don't have to go into the office anymore, but some of us still do, and if there is a costume gathering on Halloween, on a Monday this year, then I'll probably come up with something.
David Gardner: Well, that would be awesome. I will say this, I heard about a taco party at Fool HQ today, and people were popping. Maybe that's not just true of Fool HQ, but some other offices these days. I am a fan admittedly, as little as I've been to our office in recent months, I'm a huge fan of congregating, and food often brings us together. Some of my favourite food is candy that's given out at Halloween, anyway, maybe see you, on that Monday, Bro. Let's move on to Chapter Number 5. You've entitled this Night of the Living Document.
Robert Brokamp: In this case, the decedent was a fellow by the name of William Kennedy. He worked for DuPont's and participated in the company's retirement plan. He was married to a woman named Liv, but they got divorced in 1994, and in the divorce agreement, Liv waived her rights to his retirement plan. Several years later, William Kennedy died and his daughter expects to inherit the retirement plan. Unfortunately, while they're married, William had designated Liv as the beneficiary of his retirement plan. Totally makes sense, right?
David Gardner: Yeah.
Robert Brokamp: After the divorce, he didn't fill out the form to change the beneficiary designation. The administrator of the plan sent the ex-wife the check. His daughter challenged it all the way to the highest court and land, but to no avail in 2009, the Supreme Court decided in Liv's favor and she got to keep the $400,000.
David Gardner: Why is that story scary?
Robert Brokamp: Well, this is something that almost all of us have done, filled out some beneficiary designation. It could be a retirement account, it could be a life insurance policy. We may have designated some other investment or bank account as transfer in death and payable on death, and we may name our spouse, we may need our kids as backup, but then things change. You no longer are married or maybe someone has passed away, maybe you have a kid that you're going to leave an account to, but they're a spendthrift and you find out later that maybe you shouldn't leave money to that kid, but you have to update it because the law is very fuzzy on this in that you could even say in your will I want all my money to go to this person, but then the beneficiary designation had not been updated, so someone else is going to get that money.
David Gardner: I'm thinking a little bit about memory here at this point. You could argue that William Kennedy, it was a failure of his memory. Some of us are simply absent minded throughout our lives. Some of us, I'm going to include myself here, feel like our memory isn't as good as it was 10 years ago or 30 years ago, and I'm worried my memory might not be too great in another 20 or 30 years. Are there some compensatory things that either the law forgives or more importantly, are there some processes that we might want to put into place so that whether we're talking about ourselves or an older parent's work taking care of, their failing memory doesn't cause them not to sign all the forms that need to be signed.
Robert Brokamp: I think you just have to build in the habit of annually reviewing your estate plan?
David Gardner: Really? Annually. We have to review our state plans. That's scary. Annually?
Robert Brokamp: Well, because I think you have to build the habit, because if you don't, you just don't think to do it.
David Gardner: Are you saying ABD always be deciding? Is that what you're saying?
Robert Brokamp: I would say always, what is the Latin phrase from this stoics, memento mori.
David Gardner: Yes, memento mori.
Robert Brokamp: Yes, which basically means at some point you're going to die and you have to be planning on that. The state planning attorney would say you may not have to review it every year, you have to review it every few years or any significant life-change, someone moves in or out of your life, you move to a different state because the state planning laws are dictated by state. But I think you've got to get into the habit of it, and I will add to this and we'll make this the lesson too because we've talked about the lesson in that you have to update beneficiary forms. It's also a good idea to print them out and to include them with all your other documents because there have been actual real-life stories of a big-name financial services firm losing beneficiary designations. You cannot rely on Schwab, Vanguard, Fidelity, or whomever to have it on file, you should print it out and include it with all your documents.
David Gardner: Wow. For some of us, self-included, who felt going into this episode these won't be so scary, these stories because I've done this little bit of a pat on the back, we should be wiping those smug smirks off our face if we haven't put into place a process every couple of years where we are taking a look back at this stuff and making sure the game hasn't changed without our being aware of that.
Robert Brokamp: Yes, absolutely.
David Gardner: I almost feel like I'm having too much fun this week. You're making it fun for us, but it's not a fun topic, so I feel slightly guilty that it's this fun. Let's keep it fun and scary as we move on to Chapter number 6, story number 6. Rob, you've entitled this one, no mere mortal can resist the estate of the thriller.
Robert Brokamp: Yes, we're talking here about the king of pop, Michael Jackson, but it was also a single parent who had sole custody of his three minor children when he died in 2009. Fortunately, he did leave behind a will, which named his mother as the guardian of his children. By the way, singer Diana Ross was the backup. It also stated that as his estate should be transferred to the Michael Jackson family trust after his death. Here was the mistake. Having a trust actually makes a lot of sense, especially for a wealthy, famous person like Michael Jackson. The problem was it was set up in a way that the trust would not be funded until after he died, and in that case, it doesn't really make sense because it negates a few of the key benefits of the trust.
Here are the benefits of a trust. First of all, trust is not a public document unlike a will. If you put something on your well, it's going to be filed with the county or the city and everyone will be able to see it. A trust is not public, so the extra privacy afforded by a trust can reduce the chances there will be a fight over who gets what. Also property held in a trust bypasses probate, which is that this potentially long and costly process of settling at an estate. It can take up for anywhere from six months to several years for probate. Marilyn Monroe's estate, it took 39 years to get out of probate.
But by having it in trust, it bypasses probate so the beneficiaries can get access to the money quicker, and when done properly, the right type of trust can reduce exposure to estate taxes. Now, most people don't have to worry about that. Typical individual nowadays can leave up to $12 million twice that as a married couple without worrying about estate taxes. But when you're Michael Jackson and you're worth hundreds of millions of dollars, he could have saved him an awful lot of estate taxes if he had funded the trust before he passed away. But because it had to go through probate, it locked everything up. In fact, even now, even though he died in 2009, his estate is not officially closed.
David Gardner: Rob, I almost feel like you left storytelling there to give us some important facts. But I feel like I want to get back to the story here. Do you remember where you were when Michael Jackson died? I see the date now at June 25, 2009. Was that one such moment for you where you remember where you were when that thing happened?
Robert Brokamp: I was working at The Motley Fool and I was in the office and I was refreshing my computer every whatever, half hour to an hour to get the most recent information on it. Especially for people of our age David. You and I are about the same age and we grew up in the time of when we were young, it was the Jackson five, and then when we were in high school, it was Michael Jackson and thriller, so yeah, definitely a big part of us '80s kids.
David Gardner: Absolutely. Now, my memory is a little bit more blurry, but the record will show, it was a Thursday, so it was indeed a day at the office. I do keep every day on my calendar so I can literally go back and see. I see I was actually driving over the post office for passports. I don't even remember where we were headed. I went to a Washington Nationals game that night. I think Michael Jackson's death for a lot of people who were 50 something, I remember the TV show, The Jackson Five, and a huge part of pop culture really throughout our childhood and adult lives included Michael Jackson. Robert, what's the lesson that you see in this one?
Robert Brokamp: I would say, first of all, most people should consider trust, and many attorneys argue that it's better to transfer assets for your trust as opposed to a will, for all the benefits I talked about. That said they are more complicated and they're definitely more expensive. I sometimes see situations where trusts are recommended and where they're probably not necessary. But that said, they should be considered probably by the vast majority of people listening to this podcast. But you got to make sure you get the right kind and you actually have to transfer property to it. Otherwise, it's not going to provide the benefits that you want. It really gets to a larger point, and that is once you've worked with an estate planning attorney, when you leave that office, you're going to leave with some to-do list and probably with a good 10-15 items, and you got to make sure you get those done if you want your estate plan to work as intended.
David Gardner: Much of this comes down to the legal advice. Neither Robert Brokamp nor David Gardner is a lawyer or wills and estates professional. We don't even try to play one on TV, let alone on this podcast. But it does strike me that for a lot of us, a question we might have, Robert, is how do I find somebody I can trust or who's the good lawyer that really knows wills and estates or how to set up a trust versus somebody, and if I'm not a legal professional, maybe I can't discern as well the good ones from the bad ones. Do you have any process or tip for me on my search to find the good ones?
Robert Brokamp: It's a tough one and you have to start with the tried and true getting referrals and ideally from professionals you trust. If you have an accountant that you work with, a financial advisor that you work with, they ideally will have some people they can recommend. Then a final resource is the website of the American College of Trust and Estate Counsel. This is a collection of lawyers who are experienced at estate planning. But I like the website too because it has lots of good educational material. If you want to learn anything about estate planning, go to the website, but then they have a part of the website that basically finds an estate planning attorney in your area. You enter your zip code and you see who is in your town or city.
David Gardner: I know you're going to give us a simple URL because you just said something like the American College and I don't want to type that into my browser bar. What's the quick, easy URL?
Robert Brokamp: Ready? It's actec.org.
David Gardner: Oh, like Aztec but actec.org.
Robert Brokamp: That's it. You could also ask people that you know who are in your same situation. Let's say you own a business, you've talked to other business owners because that does require a certain amount of specialization to the estate planning for business owners.
David Gardner: Indeed, I basically use that same process myself. I do have a trust and I do feel good about it and it was well done by people that I respect. Now and yes, referrals often do come through professionals and the obvious type of professional to get a referral from would be a financial professional, as you mentioned perhaps an accountant that you like and respect maybe a university friend or something back in the day, they can point you in the direction of somebody who's good at wills and estates. But failing that, I would even say if next time you go to the Dr. probably doctors are people who earn more than the average American or more than the average earthling.
These might not be your first resort, but if you have no other resort, that's not a bad way to go either. People that are higher net worth that you know, that probably have had this work done and probably sought out somebody who is good at doing it. Those are good questions you can ask as well. Before we go to our final story this week, a quick reminder. Next week is our mailbag, [email protected] is our email address. We'd love to hear stories and perspective, of course, about any of the podcasts we did this month. But in particular, I could imagine this one might scare up a good story or two. Well, it's been a pretty scary week and I don't know if you've saved the scariest for last have you?
Robert Brokamp: No, I think this one is a little less scary.
David Gardner: Good. We're past the jumps scares in this week's podcast. There are no jump scares in this story.
Robert Brokamp: No, but I should say, if you are the family involved in this story, it was plenty scary enough.
David Gardner: Well, you've entitled Chapter 7, a nightmare on Wall Street. I think Rick could probably go with a nightmare on Elm Street or he could go with music from the movie Wall Street. I think either of those are directions. Let's hear which way he wants to go.
Rick: Point is ladies and gentlemen. Read is good. Read is right. Read works.
David Gardner: A nightmare on Wall Street, Robert, what do you have for the final story this week?
Robert Brokamp: This is the story of a fellow named Max Hopper, who is a pioneer reservation systems for American Airlines. That technology eventually became part of the Sabre Group, which some of us are familiar with.
David Gardner: Well, he pioneered the reservation system. Sabre. Yeah, that was pretty big back in the day.
Robert Brokamp: Yes. So he was.
David Gardner: Pre-Internet?
Robert Brokamp: Yes. Although eventually jumped to the internet,.
David Gardner: Definitely. Yeah. But this man, new logistics and technology?
Robert Brokamp: Yes. He sadly passed away in 2010 with assets more than $19 million, but he didn't have a will. Part of the will is you name who is going to be the administrator or executor of your estate. He didn't have that. JPMorgan was hired to be the administrator of the estate and, it's a big, reputable Wall Street firm. What could go wrong? Well, according to a lawsuit filed by Hopper's widow and stepchildren, JPMorgan didn't do such a good job. According to a statement from the family's lawyer, the bank took years to release basic interests in art, furnishings, jewelry, and notably Mr. Hopper's collection of 6,700 golf putters and 900 bottles of wine. That's a lot of golf putters.
I don't even know where you store all those. I don't know. Anyway, in 2017, so this is seven years after Mr. Hopper passed away, the jury sided with the family and ordered JPMorgan to pay them more than $4 billion? Yes, that's billion with a B. Why an amount that was so much larger than Hopper's 19 million dollar estate, while jurors were instructed to consider JPMorgan's net worth, which at the time was over 300 billion. It was the largest judgment awarded in all of America in 2017. However, a later court, knocked that down to a measly seven million dollars.
David Gardner: Wow. What a story. A lot of us do trust the big financial brands and JPMorgan, has earned more trust than not over the years, but it is a reminder that the choices that we make, especially for those executors in our lives as we deceed matter. Do you have an executor? How could you not if you have a will, does that person know that they are the executor?
Robert Brokamp: Yes, it's my sister-in-law who is extremely detail-oriented, which gets the lesson of this. But also she lives in this state. It is much easier to be the executor of someone's estate if you live in that state, it's not impossible if you live out of state, but it's much easier. You often have to go to the courthouse and just do all basically a lot of nitty-gritty details that are not much fun. By the way, if you are named executor, that doesn't mean you have to do all the work. You can actually hire some people to do it and it's paid from the estate and actually you can pay yourself. The net varies from each county and state. How much is reasonable compensation?
David Gardner: Yeah.
Robert Brokamp: But the thing part of it too here is you want someone who cares about you and your stuff to make sure that your state is settled, you can hire a big bank to be your administrator, but are they going to care as much about you and your legacy as someone who loves you? Probably not.
David Gardner: Is that the lesson?
Robert Brokamp: That is the lesson. You really have to choose wisely when it comes to who you appoint as your executor. It could be very time-consuming, very detail-oriented. I'm the executor of my father-in-law's estate. It's been open now for over two years because unfortunately, he didn't pay his taxes and we can't settle the estate until we pay the taxes. But to pay the taxes, we got to get his tax transcripts. There's not enough people working at the IRS to get us a transcripts. A long story. But anyways, the point being is that's the type of nitty-gritty you got to deal with. You need someone who has the skills to do that. We all know people in our lives who would be good at that and maybe people that wouldn't be so good at that. You factor that into your decision.
David Gardner: Are you paying yourself? I think you should be paying yourself some for that work, but there might not be much leftover though.
Robert Brokamp: No, the honest truth is the whole value of his estate, including his house, was $40,000. There's not much there. I feel like given the size of the state, I think it's just better to distribute it to obviously my wife and then the other three siblings.
David Gardner: Well, honorable of you to see it all the way through which it sounds like you are and why you didn't include that as one of your scary stories. That's not quite as scary as any of the seven stories. That's a little bit of a scary story and so we're to the wise. Robert, do you have any collections of things, surprisingly large collections of odds and ends in your life.
Robert Brokamp: I don't. That's pretty surprisingly large. I still have all of my albums from when I was a kid and there's some original Beatles albums in there. There are probably are some things that are pretty valuable there.
David Gardner: When you say all of your albums, how many, roughly?
Robert Brokamp: Two hundred, 300 or so. I converted over to tapes and eight tracks pretty soon or early in life. I don't have an extensive album collection. But regardless, it's there and it's old. It's probably worth something. By the way, I have some original weird Owl albums which I'm sure are worth loads of money at this point. How about you, what are your collections, David?
David Gardner: Well, I have a spreadsheet of my 870 board games that are in my house, they're both heavier than albums and there's more of them. But I think my family is already well aware of this and I won't be surprising anybody when I deceed with lots of games to take or give away. Well, Robert, you've been so generous with your time. I love all seven of the stories, each of them scary in its own way. I love your mix of well-known people and then people that we've never heard of before. We're all human. That means we're all mortal. For those of us who have at least something, it's such a gift to those who come after you. Not just to think about it and plan for it, but actually to follow through with the plans, enact sign the documents. To your point earlier, Bro, update those signatures every couple of years. Any concluding thoughts before we get ready a little bit later this month for Halloween?
Robert Brokamp: I'll just highlight something that you brought up earlier and then when I think of my own situation with my father-in-law, I knew I was the executor of his estate and I knew that he was near the end of his life. He was 95 when he passed away. I wish I had talked to him more about his estate, he was a very private person, especially when it came to money. I think there might have been a little bit of shame over the lack of money that he had. But I wish I had taken the time to speak with him beforehand and it would have saved a lot of the heartache that we have now that this money is just tied up.
I would encourage everybody to do that. The holidays are coming up. I don't necessarily think you should sit around the Thanksgiving table and everyone talks about their estate plan. But you might have the opportunity to be about around relatives. One of the ways you can begin the discussion at some point over the holidays or some other time. It's just say what you've done. I have done this. This is where you will find my stuff. This is the attorney to contact. What have you done in how can I help?
David Gardner: Great advice. Let's talk about death over dinner. Sometimes Thanksgiving there, maybe not thanksgiving dinner to Bro's point or earlier. Memorabilia. That's the way to open it up. Mementos what really matters to you, mom or dad, and have you made some plans around that to decide where you want those things to go? Well, this was a lot of fun. It was, admittedly not as scary as I thought it might be, but I think we should make this an annual tradition. As long as this podcast goes, we're in our eighth year. I don't know how long this goes, but I think every October, we should have some more scary stories with Bro. We obviously focused on deceiving this time and those who are ready or not for that. But there are a lot of scary things happening in and around the world of finance. I know you've seen so much over the years and you and I will keep continuing to have our eyes wide open as we see how the world plays out and try to give the best advice we can to our fellow Fools everywhere. You've been doing so for 20 plus years. Thanks for doing it this week on Rule Breaker Investing. Happy Halloween, Robert.
Robert Brokamp: Thank you, David, and I guess I'll see you next year.
