Will the estate of J. D. Salinger, reclusive author of "Catcher in the Rye," escape federal estate tax? If the now-suspended tax is imposed retroactively, how will the estate be valued? Suppose Salinger left publishable manuscripts but also left instructions that they not be published? Could the manuscripts nevertheless have a taxable "fair market value"?
Belts may be pulled tighter in New Haven and Cambridge, but Yale and Harvard – and other top-tier universities – found enough cash in their downsized endowments to hobnob at the World Economic Summit. At Davos, blogs David Ignatius, "some of the biggest party-givers are America’s top universities."The agency that spent more than a decade ignoring evidence of Bernard Madoff's $50 billion fraud; the agency that spent even longer constructing a credit-ratings oligopoly that still threatens investors; the agency that in 2004 encouraged Wall Street firms to increase leverage and then failed to monitor them—this agency now has spare time to meditate on climate science.
“I grew up in the 1920s and 1930s in a nouveau riche world, where money was spent wildly, and I’m still living in one!,” [Auchincloss] told The Financial Times in 2007. “The private schools are all jammed with long waiting lists; the clubs — all the old clubs — are jammed with long waiting lists today; the harbors are clogged with yachts; there has never been a more material society than the one we live in today.”
In 1922, Dr. Albert C. Barnes formed a remarkable educational institution around his priceless collection of art, located just five miles outside of Philadelphia. Now, more than 50 years after Barnes’ death, a powerful group of moneyed interests have gone to court for control of the art, and intend to bring it to a new museum in Philadelphia. Standing in their way is a group of Barnes’ former students and his will, which contains strict instructions stating the Foundation should always be an educational institution, and that the paintings may never be removed. Will they succeed, or will a man’s will be broken and one of America’s greatest cultural monuments be destroyed?Trailer for The Art of the Steal is here. The filmmakers do not appear to be sympathetic to the notion of moving the art collection. More background, including noteworthy Barnes Foundation holdings, at Wikipedia here.
Institutions with endowments greater than a billion dollars had 61 percent of their investments in such alternatives last year, compared with 52 percent the previous year. In contrast, universities with endowments under $25 million had only 13 percent of their assets in such investments, up from 11 percent the previous year.
All net job creation from 1980 to 2005 came from firms that were five years old or less, according to a study by economists John Haltiwanger of the University of Maryland and Ron Jarmin and Javier Miranda of the Census Bureau. In any one year, that may not be true; but over time, mature firms lose more jobs than they create. "It's not small firms but young firms that count," says economist Robert Litan of the Kauffman Foundation, which sponsored the study.
“It’s the poster child for the entire housing bubble,” said Daniel Alpert, managing partner of Westwood Capital. “There’ll be some other spectacular blowups, but this will be at the top of the pecking order.”The good news: There's a cure for all the economy's ailments: Jobs!
Peter Brant broke "the cardinal second-marriage rule in the multimillionaire’s handbook," writes David Segal in The Times. "He wed without a prenuptial agreement."“Being the king of prenups, I’m pretty good at that stuff. You have to have it. You’re dealing with huge finances and you need some certainty in your life and a prenup will hold up 100 percent if it’s properly drawn."Just how much wealth is at stake is uncertain. Brant's fortune was build upon the newsprint company co-founded by his father, and the business is privately held. But bad times for newspapers clearly have meant bad times for newsprint. Segal reports that several of Brant's competitors have filed for bankruptcy.
***“I’m surprised at Peter. But women can do things to men that are very unusual."
Today ILITs are not as popular as an estate planning vehicle as they were in the first half of the last decade. The situation could change depending on the action Congress takes this calendar year. Until proprietary reverse mortgages return and provide substantial proceeds, using reverse mortgages as a means of funding ILITs will be little more than an interesting curiosity of the last decade.
Rarotonga beach, Cook Islands. Photo via Wikimedia Commons.Under Cook Islands law, foreign court orders are generally disregarded, which is helpful for someone trying to keep assets away from creditors.
In fact, getting an American court order can make it harder to get money out of the Cook Islands. If someone who stashed funds in a Cook Islands trust asks for the money back because a court ordered him to do so, Cook Islands law says that person is acting under duress, and the local trustee can refuse to return the money.
Over the years, a number of less-than-upstanding Americans have found the islands attractive for that reason, among them former corporate raiders, penny stock promoters and telemarketers who defrauded customers.
The latest to use that tactic is the wife of Jamie L. Solow, a former broker in Florida who evidently has a silver tongue and certainly has a lot of angry former customers. In one year, he earned more than $3 million in commissions selling a form of collateralized debt obligations known as “inverse floaters” to individual investors who claim he never warned them of the risks.
Late Spring, 1956: G.I.'s returning from two years in Korea board a troop train in Seattle. The train, heading east, pauses for a rest stop in Butte. A few of the soldiers wander into a luncheonette, where two burly women in jeans sit at the counter. Montana girls sure ain't dainty, the G.I.'s think as they move toward a table. They turn to take a closer look. Yikes! Those two women are not women. They are men – men who have let their hair grow girly-girl long!That memory – my first encounter with the Age of Aquarius –popped into mind when I reread
Merrill Anderson's 1954 history of trust advertising. Even the most contemporary of the ads shown (sample at right) looked primitive compared with the trust ads that appeared only a couple of years later. We tend to forget how fast American life and culture was changing in the 1950s. Yes, the Greatest Generation moved to the suburbs and quietly prospered. But the 1950s also was the decade that began with Doris Day and rushed ahead to Elvis. In '56 I came home with a Japanese cover recording of "Rock Around the Clock"!
Much trouble is caused at the start of every year by legal documents inadvertently dated with the old year. Even wills are sometimes wrongly dated, causing endless trouble at the maker's decease.
Photo: Library of Congress via Wikipedia
Over the years I have notice a tendency on the part of men of enterprise to believe that very little happened in their line of business until about the time they entered it. Sharing as I did this illusion, I found it revealing to leaf through the pages of the first volume of Trust Companies, as Trusts and Estates was originally called.
You may sigh, at this point, for the good old days. As an advertising man, I give them to you.
Opponents of the federal estate tax claim it destroys family businesses. Evidence is sparse. Nevertheless, many owners of such businesses do have reason to hate the tax. Federal estate tax doesn't simply deliver a staggering blow once a generation; in practice the cost of the tax turns into an extra, added annual drain on business income. Curtis Dubay, a senior tax policy analyst at The Heritage Foundation, recently offered two examples.
Paul Kangas retired from Nightly Business Report, a program he co-hosted for 30 years, on New Year's Eve. If you missed the show, with Paul in his tuxedo, there's a link here.
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