Sponsored By

Lessons in Estate Planning from Paul NewmanLessons in Estate Planning from Paul Newman

Avoid conflict when running family foundations

Bernard A. Krooks, Founding Partner

August 12, 2015

2 Min Read
Newman's own

In an article in the August issue of Vanity Fair, members of Paul Newman’s family claim that the company, Newman’s Own, and its foundation are being mismanaged by the man who’s served as chief executive for several years.  Much of the dispute concerns changes that Newman made to his estate plan in his final years.

Newman’s Own was only an idea in 1980.  It began with actor Paul Newman and author A.E. Hotchner making homemade salad dressing and giving it away to neighbors as they went Christmas caroling.  Two years later, Newman’s Own posted a profit of nearly $1 million, all of which was given away to charity.  In 1993, Newman’s daughter Nell started Newman’s Own Organics, a division of the company.  Today, Newman’s Own produces pasta sauce, popcorn, salsa, frozen pizza and other products, and the company says it’s given away more than $400 million to charities, such as summer camps for seriously ill children.

Letter of Intention

In 1999, Newman had his attorney draft a letter stating his intention to give his children the major voice in distributing funds for charity.  He reiterated these intentions in meetings in 2006 with family members, lawyers and accountants and in a 2007 video interview.  However, after Newman was hospitalized, changes were made to his estate plan.  He re-wrote his will on April 11, 2008 and appointed two associates to controlling positions in the Newman’s Own Foundation on July 29, two months before his death.  At the reading of his will, family members learned that Newman’s daughters wouldn’t serve on the board of the Newman’s Own Foundation and that millions of dollars for their personal foundations would go instead to Newman’s wife’s marital trust.

Avoiding Conflict

Unfortunately, disputes involving family foundations aren’t uncommon.  While there’s no guarantee against conflict, families considering establishing a family foundation should establish clear communication and proper governance from the outset; be sure to emphasize administrative aspects of the foundation, rather than just giving; and engage the next generation as early as possible.  Following these principles is the best way to ensure that your client’s foundation honors his family’s legacy and accomplishes the good work he sets out to do.

About the Author

Bernard A. Krooks

Founding Partner, Littman Krooks LLP

Bernard A. Krooks is a founding partner of the law firm Littman Krooks LLP and Chair of its Elder Law and Special Needs Department. Mr. Krooks is a nationally-recognized expert in all aspectsof elder law and special needs planning. He is the President of the Board of Directors of the Arc of Westchester, the largest agency in Westchester County serving people with intellectual and developmental disabilities and their families.

 

Mr. Krooks is past President of the Special Needs Alliance, a national, invitation-only, not-forprofitorganization dedicated to assisting families with special needs planning. He is past President of the National Academy of Elder Law Attorneys (NAELA), a Fellow of NAELA, pastChair of the NAELA Tax Section and past Editor-in-Chief of the NAELA News . In addition, he is certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation and is an Accredited Estate Planner (AEP). He is a founding member and past President of the New York Chapter of NAELA. In 2008, he received the Chapter’s Outstanding Achievement Award for his lifelong work on behalf of seniors and those with disabilities. In 2007, his firm received the NYSARC employer of the year award for employing people with disabilities. In 2011, his firm received the Family Friendly Employment Policy Award from the Westchester Women’s Bar Association. 

 

Mr. Krooks is past Chair of the Elder Law Section of the New York State Bar Association (NYSBA) and past Editor-in-Chief of the Elder Law Attorney , the newsletter of the NYSBA Elder Law Section. He also is a member of the Trusts and Estates Law Section and Tax Section of the NYSBA . Mr. Krooks co-authors (1) a chapter in the NYSBA  publication Guardianship Practice in New York State  entitled “Creative Advocacy in Guardianship Settings: Medicaid and Estate Planning, Including Transfer of Assets, Supplemental Needs Trusts & Protection of Disabled Family Members.”; and (2) the NYSBA  publication Elder Law, Special Needs Planning and Will Drafting . He is chair of the elder law committee of the editorial advisory board of Trusts & Estates Magazine, and serves on the editorial boards of Exceptional Parent Magazine, and Leimberg Information Services. 

 

Mr. Krooks, a sought-after expert on elder law, special needs planning and estate planning matters, has been quoted in The Wall Street Journal, The New York Times, Newsweek, Forbes, Investment News, Financial Times, Money Magazine, Smart Money, Worth Magazine, Kiplinger’s, Bloomberg, Consumer Reports, Wealth Manager, CBS Marketwatch.com, Lawyer’s Weekly USA, Reader’s Digest, Bottom Line, The Journal of Financial Planning, The New York Law Journal, The Daily News, New York Post and Newsday , among others. He has testified before the United States House of Representatives and the New York City Council on long-term care issues. He also has appeared on Good Morning America Now, National Public Radio, Sirius XM Radio, CNN, PBS, NBC, and CBS evening news, as well as numerous other cable television and radio shows.

 

Mr. Krooks is past President of the Estate Planning Council of Westchester, a member or the Advisory Board of the National Association of Estate Planning Councils Foundation, and the Hudson Valley Estate Planning Council. He also is Co-Chair of the Long Term Care, Medicaid, and Special Needs Trusts Committee of the Real Property, Probate & Trust Law Section and a member of the Tax Section of the American Bar Association; a member of the Bar of the Supreme Court of the United States, and a member of the American Institute of CPAs. Mr. Krooks also is a Fellow of the American College of Trust and Estate Counsel (ACTEC) and serves on its Elder Law Committee. He is an Adjunct Professor at NYU Center for Finance, Law & Taxation and is a member of the NYU Institute on Federal Taxation Advisory Board. Mr. Krooks has presented on a variety of elder law and special needs topics at the Heckerling Institute on Estate Planning, the premier estate planning conference in the country.

 

Mr. Krooks has served on the Board of Directors of the Alzheimer’s Association Westchester/Putnam Chapter and the Bioethics Advisory Committee of New York Hospital. He is a member of the Blythedale Children’s Hospital Planned Giving Professional Advisory Board, a member of the legal advisory committee of the Evelyn Frank Legal Resources Program of Selfhelp Community Services, Inc., and a board member of the Caregiver’s Insights Foundation. He is listed in the Best Lawyers in America, New York Super Lawyers, Who’s Who  in America, the New York Area’s Best Lawyers, New York Magazine and The New York Times , and the Top 25 Westchester, New York Super Lawyers.