Writer Tom Clancy’s Will Demonstrates Clear and Present Danger of Estate Planning for a Blended Family


OK, I admit it.  Back in the day I read all the Tom Clancy novels – The Hunt for Red October, Red Storm Rising, Patriot Games, Clear and Present Danger, The Sum of All Fears – and saw all the movies (and yes, I read the books before I watched the movies).  How else would I have learned about Russian MiG 29s,  U.S. F-14 Tomcats, CENTCOM, and PACOM?  But while Mr. Clancy’s stories were full of international espionage and meticulously detailed military information, unfortunately his last will and testament and particularly his second codicil, drafted by a Baltimore estate planning attorney, lacked the precision of his own writing.

Mr. Clancy died from heart failure on October 1, 2013, at the age of 66.  He left behind his wife, Alexandra Clancy, a young daughter, and four adult children from his first marriage.

Mr. Clancy’s will and two codicils were filed for probate in Baltimore City, Maryland, on October 10, 2013.  The probate docket indicates that the author signed his 21-page will on June 11, 2007, and two short codicils totaling a mere three pages on September 18, 2007 and July 25, 2013.

According to a partial estate inventory filed in January 2014 and a supplemental inventory filed in September 2014, Mr. Clancy’s estate is estimated to be worth $83 million.  His largest asset was a 12% ownership interest in MLB’s Baltimore Orioles, estimated to be worth $65 million; he also had multiple real estate holdings (including a $7 million estate overlooking the Chesapeake Bay which went to his wife through joint ownership), $10 million in business interests, and, while it may seem odd it’s certainly not unexpected, a rare, operating World War II tank.

While several of the real estate holdings passed to Mr. Clancy’s wife through joint ownership with rights of survivorship (along with other jointly held investments which are not part of the probate estate), Mr. Clancy’s intent for the remainder of his property was for it to be divided among three distinct trust “buckets”:

  1. One-third in a marital trust for the benefit of his wife;
  2. One-third in a  family trust for the benefit of his wife and all his children; and,
  3. The balance in trusts for the benefit of his four adult children as well as grandchildren.

This sounds like a reasonable plan for the author’s blended family, doesn’t it?

But lurking in this type of plan for a blended family and a substantial $83 million estate is the impact of estate taxes – both federal and Maryland (when Mr. Clancy died, the federal estate tax exemption was $5.25 million and the Maryland estate tax exemption was a measly $1 million).  The total estate tax bill is estimated to be $16 million, and the Personal Representative of the estate, Baltimore estate planning attorney J.W. Webb (who drafted the July 2013 codicil – more on that below), has taken the position that trust bucket #2 (the family trust) should pay $6 million of the tax bill and trust bucket #3 (the children’s trusts) should pay $10 million of the tax bill (note that trust bucket #1, the marital trust, is designed to defer payment of estate taxes on its value until after Alexandra Clancy’s death).  But according to the “Petition for Declaratory Judgment, Construction of Will, and Removal of Personal Representative” filed in early September by Alexandra Clancy’s attorneys, the widow believes that the intent of the July 2013 codicil was to confirm that trust bucket #3 – the trusts for the benefit of Mr. Clancy’s four children from his first marriage – should pay the entire $16 million estate tax bill, thereby leaving trust bucket #2 completely intact.  Mr. Webb has so far declined to comment on the petition and has until October 17 to file his response.

International intrigue?  Not even close, just a typical day in probate court, and yet another example of celebrity estate planning gone wrong.  In addition to the questionable language in the July 2013 codicil, had Mr. Clancy created and funded a revocable living trust instead of relying on a will and some codicils as the governing documents of his estate plan, then the intimate details of the writer’s final wishes would have remained a private family matter.  In fact, this surprised me since 10 years ago I practiced as an estate planning attorney in Bethesda, Maryland, and my firm was (and still is) a firm believer in revocable living trusts.  And since this was (and still is) the case for other Maryland estate planning firms, why an estate planning attorney with a big Baltimore firm would use a will instead of a trust is beyond me.

Aside from this, the Clancy estate battle also demonstrates how tricky it is to plan for a blended family.  What was the author’s true intent?  Unfortunately we will never know, and after significant time and money have been spent, a probate judge will end up making the final decision.

Actress Lauren Bacall’s Will Filed for Probate

Actress Lauren Bacall died on August 12, 2014, from an apparent stroke. She was 89. Although she won two Tony awards and an honorary Oscar, Ms. Bacall was probably best known for her marriage to actor Humphrey Bogart and the movies they filmed together (my favorite – Key Largo).

Ms. Bacall was survived by her two children with Humphrey Bogart, Stephen Humphrey Bogart and Leslie Bogart, and her son with actor Jason Robards, Sam Prideaux Robards.

As a native New Yorker (Ms. Bacall was born in Brooklyn) and a resident of Manhattan at the time of her death, it’s no surprise to me that like fellow actors and New Yorkers James Gandolfini (Tony Soprano) and Philip Seymour Hoffman, Ms. Bacall used a Last Will and Testament, not a Revocable Living Trust, as the governing document of her estate plan.  As we learned after Mr. Gandolfini’s death in June 2013 and Mr. Hoffman’s death in February 2014, wills are public records that anyone can read.  So as soon as Ms. Bacall’s will was filed for probate in Manhattan’s Surrogate Court on August 22, reporters snatched up a copy and revealed all of its intimate details to the world.

According to the New York Post, which reported that the will was filed for probate a mere ten days after Ms. Bacall’s death because the family wants to auction off her art work this fall, the 10-page will was signed in September 2013 and provides that the estate, estimated to be worth $26.6 million, will be distributed as follows:

  1. The sum of $10,000 is left to son Sam to care for the actress’ beloved dog, Sophie.
  2. The sum of $250,000 is left to each of Ms. Bacall’s grandsons, Calvin Robards and Justin Robards, with the request that they use the funds for their education.  They will receive the balance at age 30.
  3. Employee Ilsa Hernandez is left $15,000.
  4. Employee Maria Santos is left $20,000.
  5. The balance of her estate, consisting of her $9 million apartment at The Dakota on Central Park West (where Beatle John Lennon lived and died), her interest in a trust created for her benefit by Humphrey Bogart, cash, personal effects, and rights to her likeness and movie and book royalties, is left equally to her three children with one caveat.  The will states the following:  “I request that my children respect my wish to keep private certain personal letters, writings, diaries and other papers or memorabilia.”
  6. The three children are named as co-executors of the estate.

So there you have it, all of the intimate details of actress Lauren Bacall’s final wishes.  If you don’t want all of the intimate details of your final wishes available for the whole world to read, then do what actors Elizabeth Taylor and Paul Walker did – create and fund a revocable living trust.

Keeping Your Estate Plan Private – A Lesson From Buffalo Bills Owner Ralph Wilson

It appears that Buffalo Bills owner Ralph C. Wilson, Jr. did his estate plan right because the public doesn’t have a clue about Mr. Wilson’s final wishes regarding the future of his football team.

Mr. Wilson, a long time resident of Detroit, died in March 2014 and just last month his last will and testament was filed for probate in Wayne County, Michigan.  Since wills are public court records, several reporters were quick to snatch up a copy of the will.  But much to their dismay, the will reveals very little about the late NFL owner’s estate because the will is a short “pour over will.”

A pour over will is a simple type of will that is used in conjunction with a revocable living trust.  It states that anything not transferred into the name of the revocable living trust prior to death gets “poured over” into the trust after death.  So it is the revocable living trust, not the pour over will, which spells out all of the details about who will get what and when they will get it.  And since revocable living trusts are private documents that only those mentioned in the trust – beneficiaries, trustees and their respective legal and tax representatives – are allowed to read, the public is left in the dark about all of the intimate details of the trustmaker’s final wishes.

Buffalo Bills fans were hoping that the filing of Mr. Wilson’s will for probate would give them a clue about the fate of their beloved team.  But even though multiple bids have been received for purchase of the Bills, including offers from Donald Trump, Terry Pegula (owner of NHL’s Buffalo Sabres), and a group headed by rock star Jon Bon Jovi, Mr. Wilson’s will does not reveal if those bidding must agree to keep the team in Buffalo.  Of course this is something that Mr. Wilson clearly wanted and may have included in his revocable living trust, but only the beneficiaries and trustees of the trust know for sure.  Having been born and raised in Pittsburgh I’m of course a lifelong Steelers fan, so I can certainly feel for Bills fans – if the Steelers ever left Pittsburgh it would be a catastrophe – and I’m actually pulling for the Bills to stay in Buffalo too.  But in the end money may talk and the team may walk and Bills fans won’t know for sure until after the deal is done.

What estate planning lesson can be learned from this situation?  Let’s contrast Mr. Wilson’s smart trust planning against the very public wills of actors James Gandolfini and Philip Seymour Hoffman.  In the latter two cases the public has been allowed to take a very close look at each actor’s final – and in both cases unusual – wishes and how much each beneficiary will get and when they will get it.  That’s the real beauty of using a revocable living trust and not a will as the governing document of your estate plan – it keeps all of the intimate details of your final wishes confidential.

Photo:  Bills Steelers joint training camp, August 14, 2014, Latrobe, PA