The Steve Jobs Effect - An Argument Against Trusts?

It's pretty common to find situations where the death of a family mogul in a privately-held corporation creates havoc amongst the company, instability for other investors as well as uncertainty in the disposition of the estate.  But what about this effect on a publicly-held company?  In standard corporate America, intricately-crafted succession plans help guard against the loss of a key figure possibly resulting in loss of significant financial resources.  It takes a very rare case, and rare individual, to bring this business-as-normal scenario into potential question.  But it can happen, through what I've before called the Steve Jobs effect: when an individual is so completely tied into the success of a corporation or brand that their personal agency - not the legacy of their work - is what stands foremost in customers' and investors' minds, that the potential for such a ripple effect through the public holding is a possibility.  The question is, can the individual's estate planing affect that course of events?

Now we come to find the example I've picked - Steve Jobs - is actually a counter-example.  This is not for lack of the effect being real - it's because Mr. Jobs got solid estate planning advice (No, he was not my client, but I would have advised in like manner).  As reported in the Chronicle yesterday and Forbes earlier this month, his irrevocable trusts secured nearly $3 billion in otherwise potentially-taxable assets for his family. The details of this trust relationship are private to the family, and therefore in a public company become opaque to shareholders.

So how did Apple fare upon learning of his death?  There was a significant drop, but at 5% it was only a temporary blip, due to equally impeccable transition planning on the part of Jobs.  Certainly, questions about succession at Apple are alive and well, but the bottom line is strong and anyone can see that the ship will continue on course for at least the while.

But in other situations a "Jobs effect" could be more significant.  The heretical question might arise, where the potential that a mogul's passing could seriously endanger a company's value: could the benefit of direct, open transfer of company assets to clearly involved successors - as opposed to cloaked in a trust arrangement - provide transparency and security enough to offset the tax hits that would follow?  The answer would clearly depend on the individuals, and would probably be an extraordinary case, but it's interesting to ponder nonetheless.

BB

Bighorn Buttons?

Another for the "intriguing mystery" category: we were recently doing a walk through of a client's home prior to an estate sale, discussing characteristics that might make for a better auction. We had decided to leave the place staged largely with his own furniture, including a large frame desk in the main study.

While listening through some drone or other, I was casually tugging at the drawers of this desk, and looking down ran across a yellowed envelope bulging slightly at its center.  Taking it out and opening it, we were surprised to find a small button, with a small slip of paper saying:

"Custer's Button.  Gift of P. Small 1953"

 

I've had confirmation that it is indeed a U.S. Army Cavalry button, of some vintage, but other than that its provenance is a mystery.  Some research has revealed that P. Small could refer to Pauline Small, a prominent Crow tribal leader whose grandfather was known to be a scout for Custer at Little Bighorn.  How could the connection have been made? Unclear, though as a law student at Ann Arbor in the 50's my client had done legal outreach work with tribes in Montana.  Again, we'll never know for sure...

BB

Trotting around Turkey

One of the trips Maria and I have always wanted to take is the coastal route of Turkey, followed by hopping south to Petra, Jordan.  This April we finally made it happen, flying into Istanbul on a long night flight from Brussels.  We saddled up on an old BMW with sidecar and, well, a month later and too much fun to relate here...

Istanbul

Our Rig

Soke - Temple of Apollo

Antalya

Maria floats the Dead Sea

Petra

Passing Thoughts, II

A few more: 

Our life dreams the Utopia. Our death achieves the Ideal. - Victor Hugo 

With death comes honesty. - Salman Rushdie, The Satanic Verses  

How surely are the dead beyond death. Death is what the living carry with them. A state of dread, like some uncanny foretaste of a bitter memory. But the dead do not remember and nothingness is not a curse.- Cormac McCarthy, Suttree

The great thing about the dead, they make space. - John Updike, Rabbit is Rich

To those who view the voyage of life from the port of departure the bark that has accomplished any considerable distance appears already in close approach to the farther shore. - Ambrose Bierce, "The Death of Halpin Frayser"

Here lies one whose name was writ in water. - John Keats, epitaph for himself

BB