Cava Faulkner

At some point, it’s virtually inevitable that some of your staff will leave your employment. Whether they leave of their own volition or they’re terminated, it’s simply the nature of running a business that not all employees will be around forever.

In some cases, it can be a good idea to offer departing employees a severance (separation) agreement, especially if the worker was laid off or let go for reasons other than serious misconduct. Such agreements are vital in protecting your company from lawsuits and other potentially detrimental actions by the departing employee.

These agreements may seem somewhat expensive up front, but they protect against even larger expenditures of time and money down the road. If your business is relatively small, you can be financially wiped out by just having to defend your business in court.

The primary objective of severance agreements is to shield your company from legal liability. However, these contracts can also protect your business from numerous other negative ramifications, such as defamation, loss of trade secrets, and the “poaching” of your most valuable employees.

To this end, you should consider including provisions in your severance agreements aimed at preventing all types of damage, not just lawsuits. Here are a few of the most common terms:

A confidentiality provision requires that the employee keep the existence and terms of the severance agreement confidential. By keeping the agreement private, you can avoid the appearance that the employee in question received special treatment.

What’s more, such confidentiality also prevents other employees from seeking out their own severance packages or asking for similar terms.

A non-disparagement clause prohibits the employee from making negative or disparaging statements—whether orally or in writing—about your company. This helps prevent the individual from bad-mouthing your brand and tarnishing your reputation once they leave your employment.

A non-disclosure clause prohibits the employee from disclosing your company’s trade secrets and/or other confidential information. Hopefully, you included a non-disclosure agreement in the employee’s original employment contract, but if not, adding it here can help plug this gap.

The provision should be worded broadly enough to include not just your most precious trade secrets, but all of your company’s sensitive confidential information. This can include things such as customer lists, legal information, financial data, internal communications, vendor lists, phone numbers, email addresses, and other items.

If the employee had access to sensitive information about your company, you should consider adding a non-competition clause prohibiting he or she from competing with your business for an agreed-upon amount of time, within a specific geographic area. This prevents them from working for an existing competitor as well as starting a competing business of their own.

In addition to a non-compete, you might also think about adding a non-solicitation clause that prohibits the employee from poaching your company’s clients, suppliers, employees, and other representatives. While non-competition and non-solicitation clauses cover very similar issues, neither one offers total protection on its own, so they both should be considered to safeguard your business from all angles of a competitive attack.

Though it might seem like common sense that a departing employee should return all of the equipment they used while on the job, adding a clause requiring them to do this adds an extra layer of protection.

This is especially true today, when employees are often issued numerous items and devices, such as keys, laptops, smartphones, keycards, and badges. Seeing that an entire universe of company data can be stored on something as small as a flash drive, this provision can be especially critical.

This provision keeps the agreement neutral by stating that the agreement does not constitute any liability by either the company or the employee.

This provision stipulates the specific state and venue where any lawsuits alleging a breach of the severance agreement must be filed. This allows you to ensure that if the contract is ever contested, the case will be tried in a location that’s most convenient for you and your business.

While severance agreements are crucial to protecting your business, if they’re not drafted properly and kept up to date, they can actually do more harm than good. Whether you need a brand new severance agreement drawn up or you’d like us to review an existing agreement, we can help. Contact us today to learn more.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. Or, schedule online.

In 1988, Stroh’s Beer was one of America’s most impressive family fortunes, estimated by Forbes to be worth $9 billion in today’s dollars. Just two decades later, however, the massive beer empire, along with all of the family’s wealth, would disappear.

Poor business decisions and bad investments were the primary cause of the company’s downfall. But dig a little deeper, and it becomes clear that the business wasn’t properly prepared to be passed from one generation to the next, especially over the course of 150 years.

Developing a solid business succession plan is at the heart of estate planning when a family business is involved. And even if your company and wealth are nowhere near the size of the Stroh’s clan, it’s crucial to heed the lessons that can be learned from the demise of this once-mighty American brewery.

Bernhard Stroh immigrated from Germany to Detroit in 1849. He arrived with $150 and a secret family beer recipe, and began selling his lager door to door from a wheelbarrow a year later.

In 1890, the business was passed to his sons, Bernhard Jr. and Julius. They made the brew into a regional favorite among working-class Midwesterners, and navigated the company through Prohibition by manufacturing ice cream when the country was dry.

Julius’s son, Gari, took control in 1939, and he was succeeded by his brother, John, in 1950. In the ‘50s and ‘60s, John was famous for treating his employees like family, and sales soared under his watch from 500,000 barrels in 1950 to 2.7 million in 1956.

Gari’s son, Peter, became president in 1968 and CEO in 1980, and during his tenure, the privately owned Stroh’s became America’s third-largest brewing company, behind publicly traded corporations Anheuser-Busch and Miller.

However, in 1999, following a series of poorly planned acquisitions and business deals, Peter was forced to sell off the family beer business in parts to Miller and Pabst. Most of the money from the $350 million sale went to pay off business debts, while the remainder was put into a fund for the surviving family members, which was completely tapped out by 2008.

Though building a family business of this magnitude took more than a century’s worth of hard work and dedication, it was surprisingly easy for one successor to wipe it out. That said, many of the business mistakes might’ve been prevented, or at least mitigated, with proper planning and guidance.

The most devastating events to befall the company occurred while Peter was at the helm. Unlike his forefathers, who grew the business slowly, Peter sought to rapidly expand by buying out competitors like Schaefer, Schlitz, Old Milwaukee, and others.

The problem was, Peter acquired his rivals even when the company couldn’t afford it. Peter’s acquisition of Schlitz in 1982 was particularly damning, as he borrowed $500 million to buy the brand, when Stroh’s Beer itself was worth only $100 million.

Saddled with massive debt, Stroh’s was unable to keep up with its big-name competitors and even missed the light beer trend of the 1980s. From there, Peter made a series of other mistakes related to packaging, marketing, and pricing that would hasten the company’s collapse.

Anyone who has seen the hit Netflix documentary Tiger King: Murder, Mayhem, and Madness can attest that it’s one of the most outlandish stories to come out in a year full of outlandish stories. And while Tiger King’s sordid tale of big cats, murder-for-hire, polygamy, and a missing millionaire may seem too outrageous to have any relevance to your own life, the series actually sheds light on a number of critical estate planning and asset protection issues that could apply to your family.

Over seven episodes, Tiger King provides several shocking, real-life examples of how estate planning and asset protection planning can go horribly wrong if it’s undertaken without trusted legal guidance. In this series of articles, we’ve been discussing some of the worst planning mistakes made by key people in the documentary, while offering lessons for how such disasters could have been avoided with proper planning and a trusted advisor on the team.

In part one and part two of this series, we discussed how the nightmarish ordeal Don Lewis’ daughters experienced following his death could have been entirely avoided if Don had worked with a lawyer to create his estate plan. Here in part three, we’re going to shift gears and focus on the estate planning mistakes made by the self-proclaimed Tiger King himself, Joe Exotic.

While the news that Carole forged Don’s will was a huge blow to Carole’s credibility and reputation, that very same week, Carole achieved a major victory over her arch nemesis, Joe. And ironically, that victory also involved fraud, although this time Carole was the victim, not the perpetrator.

On June 1, 2020, a federal judge awarded Carole ownership to all of Joe’s property, including his Oklahoma zoo, 16.4 acres of land, several cabins, and multiple vehicles. The ruling was part of a $1-million judgment resulting from a trademark infringement lawsuit Carole brought against Joe in 2013.

As we wrote about in part one, much of Tiger King was devoted to covering the bitter public feud between Carole and Joe that eventually resulted in Joe being sentenced to 22 years in prison for hiring a hitman to kill Carole. During this feud, Joe and Carole—both owners and breeders of big cats—repeatedly bash one another in the media over the course of decades.

At some point during the feud, Joe creates a company called Big Cat Rescue Entertainment (BCR Entertainment) for his travelling tiger cub-petting business in order to poach Carole’s potential customers. Joe even goes so far as to create business cards for the new company that feature an imitation of the Big Cat Rescue logo, photos from the Big Cat Rescue website, and a Florida phone number to trick people into thinking BCR Entertainment was actually Carole’s sanctuary.

This leads Carole to file a trademark infringement lawsuit against Joe, claiming he created the business cards to cause confusion between the two companies and steal her customers. The court agreed with Carole’s claim, and a judge ordered Joe to pay Carole and Big Cat Rescue $953,000. This judgment, along with the resulting financial stress it puts on Joe, is what ultimately motivates Joe to hire a hitman.

Following the court’s ruling, Joe knows he stands to lose his zoo and everything else he owns to pay the judgment. Desperate to keep his business and prevent Carole from collecting any of his money, Joe attempts to shield his zoo by transferring title to the property to his mother, Shirley Schreibvogel, using a series of quit-claim deeds.

Discovering Joe’s attempt to thwart her, Carole files a separate lawsuit against Joe’s mother for fraudulent transfer of property. Joe’s mother eventually admits under oath during a deposition that the zoo and land were transferred to her by Joe to remove it from the reach of creditors, including Carole. This leads the judge to rule that the property was fraudulently transferred by Joe to his mother, and this judgment effectively reverses those conveyances, giving Carole control over all of Joe’s property.

Although we certainly don’t condone Joe’s actions, he had every right to want to protect his zoo and other assets from being lost to a lawsuit—it’s just that he went about doing so in entirely the wrong way and at the wrong time. In fact, had Joe used proactive planning strategies to properly shield his assets when he started his zoo, he most likely could have  prevented Carole from seizing control of his business—and at the same time, avoided the need to commit the crime that sent him to prison.

This brings us to our third, and final, estate planning lesson—and this one will focus on asset protection:

While we know most people would never find themselves facing anything remotely similar to Joe’s situation, just about everyone faces potential liability from far more common threats. Whether from a lawsuit, divorce, debt, or accident, the more successful you get, the more risk there is that someone will want to take what you have.

Moreover, it’s a popular, yet mistaken, belief that you can safeguard valuable assets like a home or business from creditors and lawsuits (or to qualify for government benefits like Medicaid to pay for long-term care needs) simply by signing over title of your assets to another family member. Yet, as we saw with Joe, transferring ownership in this way not only won’t effectively protect your assets, but can also lead to a myriad of other legal complications for yourself and others.

Although there are a variety of different planning vehicles available for asset protection, the most airtight strategy involves the use of highly specialized irrevocable trusts. Such trusts are set up so that your most precious assets, including those you want to pass on to your children, are owned by the trust, not you. Since you can’t lose what you don’t own, those assets can’t be reached by creditors, lawsuits, or in a divorce.

For example, if Joe had instructed his mother to set up an irrevocable trust for him right from the start, and then either funded the trust with enough money to start his zoo from scratch or buy the zoo at some point after it was up and running, the trust would have owned the zoo, not Joe. In that case, Carol would never have been able to seize the zoo, even if she won a judgment against Joe.

Alternatively, if Joe didn’t have a parent or another loved one to set up the trust for him, he could have established an irrevocable trust for himself and then gifted his business and other assets into the trust. While this strategy isn’t as airtight as the first and requires the passage of years between the time of transfer and the time of protection, it can still be better than nothing, especially if you plan well in advance of any sort of an issue.

Like all estate planning, for your plan to be effective, you must have your asset protection strategy in place well before something happens. If you try to protect your assets once a claim or lawsuit is even threatened, you could end up like Joe and find yourself not only losing your assets, but also charged with fraud. To this end, get your planning started now, while there’s nothing to worry about, and you still have every possible planning option available to safeguard your assets.

As we’ve seen over the past three articles, when undertaken without the support and advice of a trusted lawyer, estate planning and asset protection planning can go tragically wrong. Although the details of the Tiger King saga are about as abnormal as they come, the lessons presented here can show all of us how to  prevent extremely common planning mistakes and apply to practically everyone who seeks to put a plan in place.

Indeed, if you attempt to handle even the most basic planning tasks, like creating a will on your own or using an online document service or transferring your property,  you’re placing everything you’ve worked your whole life to build in serious jeopardy, while opening your family up to becoming mired in costly legal battles, even decades after you’re gone. Meet with us to ensure your estate plan works exactly as intended and your family stays out of court and conflict, no matter what.

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.

Self-made millionaires are not uncommon in the dotcom era, but their fortunes pale in comparison to those of the ten richest families in America. These families weren’t overnight successes, but their fortunes have stood the test of time and are the result of strong family ties and very smart estate planning.

Anyone who has seen the hit Netflix documentary Tiger King: Murder, Mayhem, and Madness can attest that it’s one of the most outlandish stories to come out in a year full of outlandish stories. And while Tiger King’s sordid tale of big cats, murder-for-hire, polygamy, and a missing millionaire may seem too outrageous to have any relevance to your own life, the series actually sheds light on a number of critical estate planning issues that are pertinent for practically everyone.

Over seven episodes, Tiger King provides several shocking, real-life examples of how estate planning can go horribly wrong if it’s undertaken without trusted legal guidance. In this series of articles, we’ll discuss some of the worst planning mistakes made by key people in the documentary, while offering lessons for how such disasters could have been avoided with proper planning.

Last week, in part one of this series we focused on the estate planning mistakes made by Don Lewis, the late husband of Carole Baskin. Don, a multi-millionaire who helped Carole found Big Cat Rescue, mysteriously disappeared in 1997. Following Don’s disappearance, Carole produced a copy of Don’s will and power of attorney. Don named Carole his executor in his will and agent in his power of attorney.

In his will, Don left Carole nearly his entire estate—estimated to be worth $6 million—while leaving his three adult daughters from a previous marriage with just 10% of his assets. However, Don’s daughters claimed the documents Carole produced were fraudulent.

The daughters contend that their father was getting ready to divorce Carole, and because of the impending split, Don created a will that left his daughters the bulk of his estate, while largely disinheriting Carole. Yet because Don created this will on his own without the assistance of a lawyer, he failed to make and distribute copies of his plan to his daughters—or anyone else.

Don’s oversight ultimately proved disastrous, as the only copy of the estate plan favoring his daughters vanished from his office 10 days after he disappeared. His daughters alleged Carole stole the documents and destroyed them, so she could present her forged documents and inherit the vast majority of Don’s assets—and this is exactly what ended up happening when Don was declared legally dead and his estate passed through in 2002.

Although this is as far into the story as Tiger King gets—and where we left off in part one—more facts have come to light since the documentary aired that make the story even more scandalous, while also offering us additional estate planning lessons.

After seeing the documentary, Chad Chronister, the third Hillsborough County Sheriff in office since Don vanished, reviewed the old case files and assigned new deputies to investigate his disappearance. In June 2020, after enlisting the help of two handwriting experts, the sheriff declared the will produced by Carole as “100% a forgery.”

This was something Don’s daughters always suspected, but were unable to successfully prove on their own due to a lack of financial resources. After Carole first filed her copy of Don’s will and power of attorney with the court in September 1997 (a month following his disappearance), Don’s daughters challenged those documents in court as forgeries.

Court documents show that in November 1997, Don’s daughters hired a handwriting expert to examine their father’s signatures on the planning documents Carole produced. The expert concluded that the signatures were forged, noting that they had likely been traced from Don and Carole’s marriage certificate.

But Carole hired two of her own handwriting experts that concluded the signatures on Don’s documents were genuine. At the time, Don’s daughters said they didn’t have the money to continue to fight Carole over the forgery issue, so they chose not to further challenge the documents, and the court sided with Carole.

However, given the new proof of forgery, can Don’s daughters further challenge Carole in court in an attempt to recover their rightful share of his assets? Sadly, it looks highly unlikely at this late date.

Under Florida law, the general statute of limitations for legally challenging a will is four years from the date the will was filed, which expired in 2001. And while Florida’s general statute of limitations for challenging a will can sometimes be extended for up to 12 years in cases of fraud, that term expired in 2009.

On the criminal side, both the sheriff and Florida Attorney General noted that the five-year statute of limitations for prosecuting Carole for forgery has also run. Of course, there’s no statute of limitation for murder, and the sheriff said they were pursuing new leads as of July. So there’s a chance that Carole could be convicted on a charge related to Don’s death, and if so, she would be forced to give up all of the assets she inherited from him.

Florida, like most states, has a “slayer statute” that prevents anyone “who unlawfully and intentionally kills or participates in procuring the death of the decedent” from benefiting from their will. Yet even if that were to happen, it’s unlikely that Don’s daughters would be able to recover anything close to what they would be entitled to, especially since Carole has had control of Don’s assets for nearly two decades already.

Given these new facts, what actions should have been taken to prevent such an epic tragedy from occurring? This leads us to our second lesson:

Although Don was quite wealthy, according to almost everyone who knew him, he never came across as such. In fact, he was a notorious penny pincher, who reportedly was even willing to go “dumpster diving” if it meant he could save a dollar or two. In light of this, Don undoubtedly thought that he could save time and money by creating his own planning documents without consulting a lawyer.

Indeed, the potential consequences and costs to your loved ones can ultimately far exceed whatever minor savings in time and money you hoped to achieve by not enlisting the assistance of an attorney. As we pointed out last week, if Don had created his estate plan with the support of an experienced estate planning lawyer, none of this would have happened.

And that same lesson applies here as well, particularly in light of these new facts. Had Don worked with a trusted lawyer to create, maintain, and update his plan, Carole would have been unable to pass off forged documents supposedly created by Don in 1996. And that’s because his lawyers, loved ones, and the court would all have certified copies of Don’s most recent plan, rendering any previous versions invalid.

The reason you spend the time and money upfront to hire an attorney to put a proper plan in place is to prevent your loved ones from ever needing to hire their own lawyer down the road. Once something happens to you, whether it’s your eventual death or in the event of your incapacity, it’s too late—you must act now. By working with us, as your Personal Family Lawyer®, we can plan ahead to predict and prevent any potential for conflict that might arise over your estate, and we can also help ensure that there won’t be any legal grounds for your plan to be successfully contested.

Moreover, we can also ensure that your loved ones, along with anyone who might have reason to dispute your plan, are fully aware of the reasons and intentions behind every choice you made in your plan—and they learn about these choices while you’re still around. In fact, we often recommend holding a family meeting (which we can facilitate) to go over everything with all impacted parties.

Contact us, as your Personal Family Lawyer®, today to ensure your plan works exactly as intended, and your family isn’t subjected to a nightmare scenario like the one Don’s daughters experienced and are still dealing with to this day.

Don’t worry, we haven’t forgotten about Carole’s tabloid-headlining legal battle with Mr. Tiger King himself, Joe Exotic. We’ll explore the highlights of their epic feud—and offer more estate planning lessons based on it—in our third and final article in this series next week.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.