Celebrity Estate Planning - Paul Newman - Episode 120
Hey there, Legal Tea Listeners! This is your host, Jenny Rozelle. We’re back to the “celebrity estate planning” topic and for today’s episode, we’re going to dive into what happened following the death of Paul Newman. Now, Paul was primarily known for two things – acting as #1 and Newman’s Own, like the salad dressing (but it’s actually a whole food line) as #2. As we always do on celebrity estate planning episodes, let’s talk a little bit about Paul, as a person first, before we dive into his estate and what happened following his passing legally-speaking.
According to Wikipedia and Biography.com, Paul was born in Cleveland Heights, Ohio. Fast forward time, he graduated high school and enlisted in the US Navy. After serving, he went back to Ohio and attended Kenyon College. Initially, he was on an athletic scholarship and played on the football team. That is, until he got in trouble and ended up in jail, which got him kicked off the football team. In an interview he did in 1998, he said, “Since I was determined not to study very much, I majored in theater the last two years.” That’s exactly what ended up happening. He graduated from Kenyon College with a Bachelor of Arts in Drama and Economics.
After graduating, he was working at a theater in Wisconsin and that’s where he met his first wife, actress Jacqueline Witte. Shortly after meeting, they got married and eventually, had three children – Scott, Susan, and Stephanie. (Scott, of note, sadly passed away years later in 1978 of a drug overdose.) Nearly ten years into their marriage, Paul divorced from Jacqueline to marry a lady that he met and co-starred in a Broadway show called Picnic – that lady’s name was Joanne Woodward. Paul and Joanne ended up having three children, too, and they were: Elinor, Melissa, and Claire. Paul and Joanne were married all the way until Paul’s death, which totaled about fifty years. So, at Paul’s death, left his wife, Joanne, and five children – 2 from his first marriage, Susan and Stephanie, and 3 from his second marriage, Elinor, Melissa, and Claire.
Paul is well-known for many things – but if you know of Paul Newman’s name, it’s likely due to his acting in many big films (with his biggest movies being in the 60s and 70s mostly – like Cool Hand Luke, Harper, Sometimes a Great Nation, Cat on a Hot Tin Roof, The Hustler, The Color of Money, etc.) OR it’s likely due to something not acting-related at all, but … food.
Along with his friend, who was a writer by trader, named A. E. Hotchner, Paul and A.E. founded the food products line, Newman’s Own, in 1982 – according to Wikipedia and Biography.com. Now, I know Newman’s own as salad dressing – and that is with Newman’s Own started with, actually, but since starting with salad dressing, Newman’s Own ended up expanding to other things like pasta sauce, lemonade, popcorn, salsa, and even wine! What’s cool about Newman’s Own products is that all proceeds (after taxes are paid) are donated to charity. I wanted to see what charities it supports, so I actually while I was doing this episode’s research, Google’d Newman’s Own, and on the search results page, it said, “Newman’s Own, 100% Profits to Kids.” They have a whole page on their website with information related to their mission supporting kids – which I love. Check it out. I put the link in the source links for this episode.
Now, shifting to the end of Paul’s life – in 2008, according to Wikipedia, it was starting to be reported that Paul was not doing well. Specifically, the word on the street was that he was diagnosed with lung cancer. Of note, Paul heavily and frequently smoked for many, many years. On September 26, 2008, it was reported that Paul died in his home, which was located in Westport Connecticut. Following his death, it was confirmed Paul had an estate plan – and it was a fairly elaborate one, which included not only planning for his personal assets, but also included a foundation to support Newman’s Own. So let’s dive in to see what was going on and what ended up happening to Paul’s estate that was reported to be in the neighborhood of over $600 Million Dollars…
According to LiveAbout.com, Paul’s estate plan was originally signed in April 2008 (and remember he passed away in September of the same year), but even after it was signed in April 2008, it was subsequently amended in July 2008. His estate plan consisted, like I said, a foundation for Newman’s Own, but for his personal assets, he had a Last Will and Testament that dealt with some personal assets, but ultimately distributed assets from the Will to the Newman Living Trust Number One. So, a few things to note about his estate plan:
- For Paul’s airplanes and race cars: the Executors were to sell them and put them in his, what is called, residuary estate – which basically means that they turned into cash and got dumped into his estate to be distributed to his estate plan beneficiaries.
- For Paul’s theatrical awards, like Oscars, Golden Globes, Cannes Film Festival Awards, Emmys, etc., were to be distributed to his foundation, Newman’s Own Foundation.
- All his other personal property, like household things, instruments, cars, etc., were distributed to his wife, Joanne.
- All of Paul’s non-foundation business interests he as involved in (like Coleytown Productions, Aspetuck Productions, an d Newman Foreman Productions), including any of the royalties and income he received from them, were to be distributed to his Newman Living Trust Number One.
- Two last things to note … first, was that his April 2008 Will left all real estate to his wife, Joanne, but then the July 2008 amendment, left “just” the Westport, Connecticut house to Joanne.
- Once all of that got taken care of, and a few other things that I chose to sort of skip over to not bore you with legal gobbly gook, the remaining part of Paul’s estate went to his Newman Living Trust Number One.
There’s little known about the Newman Living Trust One, well, because that’s like the whole point of a trust – is to ideally keep things nice and private. Though, one thing that is known, and according to LiveAbout.com, is that the trust created a sub-trust (called a marital trust) to support his wife, Joanne. This whole “marital trust” setup is super common, in my estate world, for a few reasons – first, like I said, trust planning keeps things private; second, doing marital trust planning (as part of a bigger trust plan) allows someone to do estate tax planning (which I just did an episode on … what was that just a few episodes back?); and third, it allows for Paul, as the trust creator, to be certain that a very specific plan is documented and followed. With being a blended family (second marriage, kids from two relationships, etc.), this setup likely made sense for Paul to ensure that Joanne, as his second wife, could not “take away” from the inheritance for Paul’s kids from his first marriage.
The really “big drama” in Paul’s estate actually came relating to the foundation, Newman’s Own Foundation. So, let’s dive into that quickly…
According to a blog by a law firm in Michigan called Estate Planning & Elder Law Services, P.C., even though Newman’s Own Foundation was founded be Paul and his friend, A.E., Paul was the sole member of the foundation when it was born. So, to me, that sounds like maybe A.E. just helped Paul get it “off the ground” so to speak – but really, it was Paul’s baby, which makes sense since it’s called Newman’s Own after all! So, fast forward time, and now we’re in the last few months of Paul’s life – a few months prior to Paul’s death, Paul executed a “Consent of Sole Member” document on behalf of the Newman’s Own Foundation and made his friends and advisors, Robert Forrester and Brian Murphy, the second and third Members of the Foundation. So then, when he died, his children were surprised to learn that none of the family (his children nor his wife) were on the Board of Directors for Newman’s Own Foundation.
Consequently, two of Paul’s children, specifically Elinor and Susan, sued Newman’s Own Foundation – and even though Paul died in 2008, this lawsuit just came about last year in 2022. Personally, I find it interested that Elinor is from Paul’s first marriage and Susan is from Paul’s second marriage – so, it almost seems the blended family united and went after the foundation. In their lawsuit, they claimed that one of the directors acted in his capacity as a Director improperly AND that “undue influence” was exerted over Paul in his dying days when the change was made. So far, this lawsuit has not been resolved or settled yet – so even though Paul died in 2008, 15 years ago, things are still lingering now in 2023. Most recently, relating to the lawsuit, the Foundation’s CEO stepped down at the end of 2022. Though, currently at the end of 2023, the lawsuit is still pending – and I don’t have an ending to share with you. Crazy that’s the case since he died 15 years ago!
I think the big takeaway here, as I’ve discussed before here on Legal Tea, is communication. Last time we chatted about communication in an estate planning venture was in the episode about Casey Kasem’s estate – he, too, made some changes and didn’t tell people, and that causes significant issues after he passed away. I have to wonder if the lawsuit could have been avoided by clear communication to his kids and spouse. Though, maybe not – since he made this change in the 11th hour, which is part of his kids’ argument … that there was undue influence going on in Paul’s final days. Whether there was or wasn’t, that’s not for me to decide – all I know is 1) clear communication and being transparent is often important and helpful in an estate planning venture and 2) waiting until the 11th hour to make changes is also going to be ripe for issues. I see that happen all the time in “real life.”
Alrighty, I think we’re ready to wrap this episode up. Next week, I’m taking the week off since it’s Thanksgiving week. So, during the short one-week break, maybe it’ll give you some time to catch up on missed episodes or something – or you could find your favorite episode and listen to it on the way to a family or friend get together! I’m stretching here, aren’t I? Ha! Anyway, the following week after Thanksgiving, I’ll be back – so let’s see…I’ll be back on November 28th. On that episode, we’ll be diving into a “cautionary tale” type of episode. Until then, take care, be well, and have a great Thanksgiving day and week! As I always say to my Uncle on Thanksgiving, make sure you wear your stretchy pants!