Be Your Own Superhero: Protect Yourself From Financial Predators

Spider Man. Ant Man. The Fantastic Four. The Hulk. These comic book superheroes sprang from Stan Lee's imagination and made their creator a wealthy man. But at 95, the Marvel mogul's own powers appear diminished, potentially putting him and his estimated $50-$70 million fortune in jeopardy.


No superhero is swooping in to save Lee - but there is Tom Lallas, Lee's former estate planning attorney. Lallas recently filed a petition with a Los Angeles court alleging that Lee is being abused by his business partner, Keay Morgan. Lee reportedly has hearing, visual and possibly cognitive impairments. The court issued a temporary restraining order against Morgan on June 13 and appointed Lallas as Lee's legal guardian, pending further investigation.


Morgan deals in artifacts related to cultural figures, particularly Marilyn Monroe and Michael Jackson. He met Lee years ago through Lee's daughter and only child, J.C. Both Lee and his wife Joanie have had a combative relationship with their daughter, with disputes often revolving around money (more on that later). When Joanie passed away in July 2017, Morgan stepped in as Lee's caregiver. According to the court filing, Morgan began isolating Lee.  He fired Lallas and other longtime staff members, including the housekeeper and  gardener. He replaced Lee's accountant with his own friend. He changed Lee's phone number and refused to allow family and friends to visit. He also moved Lee out of his longtime family home and into a condo.


The Los Angeles police are currently investigating the matter. It is far from clear-cut; Lee himself has defended Morgan's behavior. On one Twitter post he wrote: "I just want to go on the record and say I have only one partner, only one person who does represent me, and that's Keay Morgan. Anybody else who claims to be my rep is just making that story up." Whether that post was actually written by Lee is not known.


Daughter J.C. is now 67. According to an  April 10, 2018 story in The Hollywood Reporter, she has never been self-supporting and relies on funds from the trust her parents established for her. A prodigious spender who reportedly blows through $20,000 to $40,000 every month, she nonetheless resents the trust's financial restrictions and has been known to take out her frustration on her parents. The family housekeeper recalled that J.C. would phone her father several times a day to berate him about money, leaving Lee hoarse and agitated from fighting with her. At one point he allegedly said he would cut her off completely. Another individual familiar with the family relates that in 2014, J.C. became infuriated when she learned that a new Jaguar parked in her parents' driveway was a leased vehicle in her father's name, and not a gift for her. She physically attacked her mother and father. The Lees did not press charges out of concern about negative publicity and the impact on their daughter. 

Legal Steps You Can Take To Protect Yourself From Financial Predators

Regular readers of this blog will recognize that this situation is not an outlier. Elder financial abuse is becoming increasingly common as Baby Boomers age. Numerous initiatives continue to be taken at both the state and federal levels to protect seniors and to encourage reporting of potential abuse. One recent step in that direction is the federal Senior Safe Act, which you can read about here. 


You can also take your own proactive steps to protect yourself and your assets from financial predation. We often recommend establishing a Predator Protection Trust for clients who are concerned that as they grow older, their adult children or others may try to take advantage of them financially. It is an unfortunate fact of life that it is family members - the ones we should be able to trust the most - from whom we most need protection.

How The Predator Protection Trust Works

A Predator Protection Trust is an irrevocable trust in which you specify how the trustee may expend funds on your behalf. This gives you, the grantor of the trust, the ability to establish a trust for your benefit and anyone else you desire, and put someone else in charge. Then, when demands are placed on you for money - usually from a "loved one" - you can respond that you cannot meet those demands because you have no authority to give money away. 


You may appoint one or more trustees.  Some clients select a financial institution, or their accountant or lawyer as co-trustee along with a family member. 


Here's a case I had that illustrates the value of this kind of trust. My client complained about a conniving granddaughter who was constantly bullying her and demanding money. She had given in to the badgering many times. My client was exhausted from the battle, and was increasingly worried about her own financial welfare. We solved my client's problem by setting up a Predator Protection Trust for her. I then followed up by sending a letter to the client's granddaughter, and to all her grandchildren and children, indicating that the client no longer had control of any of her assets under her new irrevocable trust and therefore would no longer be able to gift any assets to them. I explained that although my client presently had full competency and capacity, she recognized that she could lose capacity in her declining years and become vulnerable to financial manipulation. The Predator Protection Trust provided my client with peace of mind because she now knew her assets were kept safe for her use, and that her loved ones' inheritances were also secure.



Contact our office at 561-625-1100 to discuss establishing a Predator Protection Trust.

Estate Planning When Your Beneficiary Has A Drug Problem: The Sad Story Of Matthew Mellon

Do you have a beneficiary with a drug problem? You are not alone. The Federal Reserve's Report on the Well-Being of American Households in 2017 reveals that one in five Americans knows someone who is addicted to opioids or prescription painkillers. That’s doesn’t even include all the other available habit-forming drugs.


If you have a loved one with a substance abuse problem and want to include that person in your estate plan, proceed with caution. Consult with an experienced estate planning attorney to explore the best approach. Inheriting a large sum of money can be detrimental to your loved one's health. The recent death of Matthew Mellon, scion of the banking dynasty, illustrates this sad point.

A South Florida native, Mellon was raised in Delray Beach by his mother and stepfather. Mellon was diagnosed with bipolar disorder, and his substance abuse problems emerged while he was still in school. He was in and out of rehab facilities from an early age. Nevertheless, in 1998, the 21-year-old inherited $25 million from one of 14 trusts under which he was a named beneficiary. Subsequent events demonstrate that for someone like Mellon, having that kind of money can be a curse, not a blessing.


Mellon met his first wife at a Narcotics Anonymous meeting in London. They had one daughter. In 2015, Mellon married again and had two more children. The drug problems were ever-present. In a 2016 interview with the New York Post, Mellon said that at one point his oxycontin habit was costing him $100,000 every month. And he could afford it. He was living in luxury at a swank New York hotel and he was rich - and in fact, about to become even richer as a result of his timely investment in cryptocurrency. Thanks to that investment, Mellon went from being a mere multi-millionaire to being a bitcoin billionaire.


In April 2018, with his second marriage failed, Mellon headed to a rehab facility in Mexico. Upon arrival in Mexico, he did not go directly to the facility. Instead, he checked into a hotel, and was later found dead in his hotel room. His death was attributed to ingestion of ayahuasca, a hallucinogenic.


Mellon's estate is now in probate. According to reports, the estate consists almost entirely of cryptocurrency, whose value is rapidly declining. Estate administrators are eager to sell off the assets before they decline further. Given all the circumstances, I suspect we will hear much more as the probate process goes on. Mellon left behind a fortune, albeit a greatly reduced one, and three children from two wives. If the way he planned for death in any way resembles the way he lived, the family may have a legal mess on its hands.


If you have a loved one like Matthew Mellon, even if you don't have a lot of money, it's critical to get your estate planning right to protect your peace of mind, protect your family, and protect your loved one from himself/herself. The Karp Law Firm's attorneys have helped many families facing this dilemma. Contact us for advice by phoning 561-625-1100 or emailing us here.

Hear Kim Campbell talk about her Alzheimer's journey, June 12 in West Palm Beach

Our law firm is co-sponsoring this wonderful event on June 12!