Friday, January 26, 2007

James Brown's trust in the news

The estate of the "godfather of soul" James Brown is shaping up to be an interesting one for fans of celebraty estate planning. Two controversies have emerged.

First, there is some question over whether Brown's long-time companion, Tomi Rae Hynie, is entitled to anything. She was not mentioned in Brown's will, which was executed before they married. The legitimacy of the marriage itself is not free from doubt, as Tomi Rae was already married when she and James exchanged vows, and they never repeated the ceremony after her annulment came through. Estate representatives are reportedly asking for paternity testing of Hynie's child, even though James signed the birth certificate.

At the time the will was executed, most of Brown's assets were transferred to an irrevocable trust. His children are not the trust's beneficiaries. Instead, the trust will be used for the educational needs of Brown's grandchildren and "needy children." Doesn't sound like this trust will be eligible for the charitable deduction.

In the latest wrinkle, the children have asked that the trustee be replaced. The current trustees are Brown's attorney, his business manager and a former South Carolina magistrate. A trusteeship hearing is set for February 1.

I'm hoping that this will prove to be a teachable moment for choosing your trustee with care.

2 comments:

JLM said...

Sounds like "generation-skipping" with a vengeance. If Brown's children are not beneficiaries, what entitles them to object to the trust's management? Are they spokespersons for the grandkids? Or are they claiming that the trustees have appropriated assets that properly belong in the probate estate?

Anonymous said...

Good questions. The news reports don't make it clear, and I haven't read the court filings.

It does seem clear that the business guys see this trust as a mechanism for milking the James Brown legacy in perpetuity—they explicitly compare the situation to Elvis. Although they are not trust beneficiaries, they doubtless have been paying themselves handsome trustees' fees, and hope to continue.