Hey there, Legal Tea Listeners! This is your host, Jenny Rozelle. We’re back to “estate planning of the rich and famous” where we chat about celebrities and their estate planning (or lack thereof!). Today’s episode is on John Dorrance, who, at the end of last episode, I referred to him as the FOUNDER of Campbell Soup Company – Forgive me for my mistake, but he was not the founder. I think someone gave me the idea to do an episode on him and either they told me wrong -or- I just misheard; nonetheless, John’s “history” with Campbell’s makes you feel like he’s the founder. But before we get into that, as I always do on these episodes, I’m going to go over some background information on John, first, before we dive into what transpired after his death with his estate, which will come in a few minutes.
Alrighty, so John … let’s go over how John even got affiliated with the company. According to Campbell’s own website, Campbell Soup Company was founded in 1869 by two gentlemen – Joseph Campbell and Abraham Anderson. Back then, it was founded as Anderson & Campbell, but later became Campbell Soup Company. By 1894, nearly thirty years later, both original founders, Joseph and Abraham, had retired – and Arthur Dorrance took the lead as President in 1894. Arthur’s nephew, John, who was not yet leading the company (because Arthur still was), invented the process of condensing soup in 1897, which, as their website explain, “makes the soups more affordable for families while preserving the quality of the ingredients.” He was actually a chemist by training – having his Doctorate, so technically, he was Dr. John Dorrance! Well, in 1914, Arthur retired and John took the lead becoming the President of the company. Shortly after becoming President, he ended up “buying out” the Campbell family becoming the sole owner of the company.
More personally-speaking, according to his Wikipedia page, John was married … wife’s name was Ethel … and together, they had five children – Elinor, Ethel (yes, which was her mother’s name), Margaret, Charlotte, and John, Jr. (which he went by Jack). About sixteen years after John took over at Campbell’s, he sadly passed away on September 21 1930 due to heart disease – and he passed away in his home in New Jersey. After his death, an estate plan was located and according to Time Magazine, his thirty-five page Last Will and Testament was read out loud to his heirs – and my goodness, it was a bit of a surprise to me to learn about! So, let’s dive into it…
- First, his only son, John, Jr. (or he went back Jack) – got his library, his grandfather clock, and, wait for it, one-fourth if the estate (when John’s wife, Ethel, and John’s other four kids were all living!)
- Second, John’s wife, Ethen received approximately a one-fourth share too.
- Finally, his four daughters, Elinor, Ethel, Margaret, and Charlotte each received an one-eighth share.
So, if you do the math, basically one-half went to his wife and son (2 people) and the other half went to his four daughters (4 people). What I was personally a little surprised about was how much John Jr./Jack got compared to everyone else!
Fast forward time, as people aged, got married, had families, etc. more people became a part of the John Dorrance family, of course. Since John, Jr. got such a significant portion of the company, the company, as a CNBC article stated, “stayed most tightly through Jack’s immediate offspring.” Jack, who passed away in 1989, had a wife, three children (another John who went by Ippy, Mary, and Bennett), and eight grandchildren (at the time of his passing). Mary and Bennett, according to that 2018 CNBC article, hold (they are both still living today!) a significant portion of the company. Though, Ippy, as he was nicknamed, sold his part of the company in 1996 and moved to a different country. Ireland, if you care to know.
Now, another child of John, Elinor, had two daughters, Dorrance (went by Dodo) and Hope. Dodo somewhat recently died in 2017 – but left behind three children (two sons, one daughter). Hope, on the other hand, is still living today – so she continues to hold her part of the company. For the other three children of John, Ethel, Margaret, and Charlotte, I could not find much about them at all – like, about their children, their families, etc. So, I don’t have a lot to report about the rest of them.
Honestly, a lot has happened, naturally, between the family and what has happened over time with the ownership interests of Campbell Soup Company – like, some of the articles I read online gave details about specific percentages of ownership interests, but at this point, especially because we are multiple generations “down the line” from John … it’s really difficult to tell who owns how much at this point. So, just know there IS a portion of the company that remains in the family, but there is a significant portion that has been sold to parties “outside” the company, too.
Now, another thing I wanted to touch on with John’s Estate was taxes. And boy, there’s some juicy stuff here. So, according to his Wikipedia, after John’s death, a lot of litigation happened regarding his estate and taxes – and it all had to do with what was his “domicile” for tax purposes. And even more specifically, estate and inheritance tax purposes. Essentially, two states, Pennsylvania and New Jersey, both tried to claim that John was domiciled or resided in their state. They were both claiming it because they wanted to be able to claim that they were entitled to the taxes from John’s estate. You may be wondering … “Why?” or “How is that possible?” Well… as Quimbee shares in a summary of the case:
“John T. Dorrance (defendant) was born in Pennsylvania. After his education, he became employed in New Jersey. There, he was immensely successful as the head of Campbell Soup Company. Between 1911 and 1925, Dorrance and his wife lived in a country home in Cinnaminson, New Jersey, with their children. In November 1925, Dorrance, his wife, and their four children (aged 18, 16, 14, and 10) moved to a much larger, luxurious estate in Pennsylvania known as Woodcrest. The family lived at Woodcrest, the children went to school there, and their social lives centered around Woodcrest. Dorrance commuted to work in New Jersey. Dorrance continuously owned Cinnaminson, where his mother and sister lived from 1926 until their deaths in 1928 and 1929. Many of Dorrance’s friends and acquaintances believed he was a Pennsylvania resident after 1925. Dorrance, however, took measures to claim a New Jersey domicile, such as executing formal documents to that effect, on account of New Jersey’s favorable inheritance and estate laws.”
So … what ended up happening? BOTH the SUPREME Court of Pennsylvania and the SUPREME Court of New Jersey … both held that John was domiciled in each of their respective states, which meant that John’s estate was required to pay estate taxes in BOTH states. Naturally, the estate was like, “What the heck?! That’s not fair!” and they sought relief from the United States Supreme Court. Yes, like the UNITED STATES Supreme Court. Unfortunately for them, the request for review was denied – that basically means, “We’re not going to hear your case.” (Yes, they can do that.) With all this back-and-forth and to spare you the really boring legal process and legal analysis details, John’s Estate ended up paying both states’ tax bills – which is super, super, SUPER rare. In fact, I found a publication by the National Tax Association, which was published in 1940, that referenced John’s Estate and the battle of the states. In it, it said: (Talking about John Dorrance and the estate heirs) “They are the people who paid instead of $15,000,000 or $16,000,000, about $32,000000, and that payment seemed to shock the conscience of not only the man on the street but the so-called experts…”
So yeah, it was surprising to a lot of people, to say the very least. If you enjoy learning about this sort of stuff, this episode took me a LONG TIME to research and prepare for because there’s SO MUCH out there regarding his estate and taxes – so dive into the rabbit hole, if you want to learn more! Now, let’s shift to a couple things we can learn from this because it is so important to me for these episodes to be able to learn something from them. So, two things come to mind for John’s Estate.
First, this episode reminds me of something we commonly hear from our clients about wanting to keep a business or a farm in a family for generations, or as my clients would like to have it, forever and ever and ever. Well, forever and ever and ever is impossible – there’s a little thing called Rule Against Perpetuities that the Bar Exam LOVES to test us lawyers on … and it basically prevents something from something from staying in a family forever. For a long, long time – like generations? Sure, that’s easy. But forever and ever? That’s literally not allowed, thanks to that weird thing called the Rule Against Perpetuities. As we can see with Campbell Soup Company, various family members have sold or transferred their share for whatever reason. Eventually, you can imagine a share of a business or a farm getting in the hands of someone that you may not want to have involved – think, your great great great great grandson who has an addiction, or your great great great great granddaughter that is in and out of jail, etc. and all your other “fine and dandy” family members have to deal with them as a fellow owner, or whatever. So, just use this as a bit of a reality check that if you say you want something to stay in the family forever – there really could be serious issues down the road with that goal.
Secondly, and quickly, the whole double-tax-thing is nearly unheard of and there are certainly ways to prevent that from happening. Written expression and documentation of your domicile, for starters. So, if this “hit home” be sure to bring this up with your estate attorney to make sure you’re protected.
Alrighty, let’s wrap this episode up and shift to a sneak peak at next week. Next week we’re back to a “cautionary tale” episode where we talk about real-life clients, real-life cases that I, or my office, have worked on -or- maybe they are just generally good things to know/be aware of so you don’t slip up and turn into a cautionary tale one day. Next week, I haven’t decided yet what I’m going to blab about – so you’ll just have to tune in to find out I guess, but until then, Legal Tea Listeners…take care and be well!
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