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From Leydorf to Haigh RE: "Estate Planning for President and Mrs. Nixon" 6 pgs. [Subject: Personal] [Letter], 7/12/1974
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From Leydorf to Haigh RE: "Estate Planning for President and Mrs. Nixon" 6 pgs. [Subject: Personal] [Letter], 7/12/1974
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Richard Nixon Presidential Library
Contested Materials Collection
Folder List
Box Number
Folder Number
Document Date
No Date
Subject
Document Type
Document Description
53
28
7/12/1974
Personal
Letter
From Leydorf to Haigh RE: "Estate Planning
for President and Mrs. Nixon" 6pg
Tuesday, June 19, 2012
Page 1 of 1
Presidential Materials Review Board
Review on Contested Documents
Collection:
Staff Secretary
Box Number: 113
Folder:
[Misc. Memos: WH Staff, Salary, Schedule, Communications;
Classified and Unclassified]
Document
Disposition
27
Return Private/Personal
DOCUMENT WITHDRAWAL RECORD [NIXON PROJECT]
DOCUMENT
DOCUMENT
NUMBER
TYPE
SUBJECT/TITLE OR CORRESPONDENTS
DATE
RESTRICTION
N-1
memo
Leydorf to Haig re: "Estate
7/12/74
(
[Doc.#27]
Planning for President and
Mrs. Nixon".
FILE GROUP TITLE
BOX NUMBER
STAFF SECRETARY
113
FOLDER
[misc. TITLE Memos: W.H. staff, salary, Schedules, Commanications;
classified and unclassified]
RESTRICTION CODES
A. Release would violate a Federal statute or Agency Policy.
E. Release would disclose trade secrets or confidential commercial or
B. National security classified information.
financial information.
C. Pending or approved claim that release would violate an individual's
F. Release would disclose investigatory information compiled for law
rights.
enforcement purposes.
D. Release would constitute a clearly unwarranted invasion of privacy
G. Withdrawn and return private and personal material.
or a libel of a living person.
H. Withdrawn and returned non-historical material.
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
NA FORM 1421 (4-85)
LAW OFFICES
WILLIS, BUTLER & SCHEIFLY
ARTHUR B. WILLIS
DEAN S. BUTLER
20TH FLOOR
JOHN E. SCHEIFLY
FRED L. LEYDORF
CITY NATIONAL BANK BUILDING
IRVING M. GRANT
DUDLEY M. LANG
606 SOUTH OLIVE STREET
JAMES F. CHILDS, JR.
MICHAEL I. BLAYLOCK
JOHN J. BARCAL
DAVID R. DECKER
LOS ANGELES, CALIFORNIA 90014
STEVEN W. PHILLIPS
CHARLES R. AJALAT
NEAL S. MILLARD
DAVID L. CASE
TELEPHONE (213) 620-1650
July 12, 1974
General Alexander Haig
c/o United States Secret Service
S.C.P.D.
Box 200
San Clemente, California
Re: Estate Planning for President and Mrs. Nixon
Dear General Haig:
On June 5, 1974, we sent to Fred Buzhardt new Wills for President and
Mrs. Nixon, along with documents entitled "Revocation of Trust" re-
lating to "The Family and Literary Properties Trust" and "The Patricia
R. Nixon Trust". We have been informed by one of Fred's aides that the
originals of all of these documents have been executed and are in Fred's
personal safe, awaiting his return to his office. In my letter of June 5,
I gave some recommendations as to disposition of the signed documents,
and I am sure that Fred will review these and take the necessary action
once he returns to his office. We are, however, proceeding on the
assumption that the various documents referred to have been executed by
the President and Mrs. Nixon.
There are several remaining points relating to the President's estate plan
which need some further thought and attention. I would consider the major
items to be as follows:
1.
The President has expressed a desire in the past, which
he reiterated during our meeting on May 31, to make some
provision for Rose Mary Woods and Mr. and Mrs. Sanchez.
This was considered in 1972, when the Mudge Rose firm
put together the various documents relating to the prior
estate plan. At that time, it was intended to designate the
WILLIS, BUTLER & SCHEIFLY
General Alexander Haig
2
July 12, 1974
foregoing parties as beneficiaries of certain life insur-
ance policies on the President's life, so that funds
would pass directly to these parties following the
President's death. I believe it was intended that
$25, 000 should be left to Miss Woods, and $25, 000
to Mr. and Mrs. Sanchez or the survivor of them.
I have checked with Mr. Alexander's office, and they
have indicated that no further action was taken relating
to Miss Woods and the Sanchezes, and more particularly
that they have not been designated as beneficiaries of
any life insurance policies. Accordingly, at this point,
no provision has been made for them at all. I there-
fore think this should be brought to the President's
attention.
"The simplest way to make provision for these individuals
would be to do a Codicil to the President's Will, whereby
he could leave them a specific bequest of whatever
amounts he deemed appropriate. It could also be pro-
vided in the Codicil that these bequests were to pass
tax free to the recipients. On the other hand, some
provision could be made to designate them as beneficiaries
of certain life insurance policies, which would have the
practical effect of making the gifts somewhat more confi-
dential, since they would then not be referred to in the
Will. Proceeds of life insurance could also be distributed
free of any death taxes as far as the recipients were con-
cerned. A third possibility would be to make lifetime
gifts to these parties, which seems to me to be the least
desirable alternative at this point in time.
2.
In accordance with the President's request, I did meet
with Earl Adams in Los Angeles, to obtain his thoughts
on the naming of possible successor executors under the
Wills of both President and Mrs. Nixon. He did agree to
serve as a co-executor of the President's Will along with
Mr. Rebozo, but expressed the same concern we did in
having a nonresident executor or co-executor, because
of the additional cost involved and the potential mechanical
problems of having one executor in California and the
other in another part of the country. Mr. Adams recog-
nized that the naming of an executor or successor executor
WILLIS, BUTLER & SCHEIFLY
General Alexander Haig
3
July 12, 1974
is a very personal matter, and certainly the President
should give it sufficient thought and attention.
Mr. Adams mentioned three individuals who might be
appropriate, Jack Drown, Herb Kline and Paul Keys.
Any of these individuals could be named as co-executor
with Mr. Adams, or as a successor executor either to
Mr. Adams or to Mr. Rebozo. Their insertion in the
President's Will, or in a successor capacity under the
Will of Mrs. Nixon, could be done either by codicil or
by retyping the existing Wills. Of course at this time,
the President may have some additional thoughts as to
who should be named in these capacities.
3.
The basic estate plan established by the Mudge Rose
firm in 1972 involved the use of three living trusts. As
indicated above, two of these trusts have now been re-
voked. The third trust, known as "The Irrevocable
Literary Trust" remains in existence. Since this trust
is irrevocable, it cannot formally be revoked, but its
only asset is a Statement by Arthur M. Burns before
the Joint Economic Committee on July 26, 1972, and
if it is desired not to utilize this Trust in the future,
its existence can be terminated. as a practical matter
merely by turning this Statement over to the govern-
ment archives or some other governmental entity.
The Irrevocable Literary Trust is a tax exempt,
charitable trust. The Mudge Rose firm filed an
"Exemption Application" with the Internal Revenue
Service in 1972, seeking a determination letter that
the Trust would qualify as a charitable trust under
Section 501(c)(3) of the Internal Revenue Code, on the
basis that it was organized and to be operated exclu-
sively for educational, charitable and literary purposes.
On November 8, 1972, the Internal Revenue Service
gave a determination letter stating that the Trust is
exempt under Section 501(c)(3) of the Code. As a re-
sult, any contributions to the Trust would be deduct-
ible for Federal income tax purposes, and any distri-
butions to the Trust also would be deductible for Federal
estate and gift tax purposes.
WILLIS, BUTLER & SCHEIFLY
General Alexander Haig
4
July 12, 1974
I believe this Trust has been well drafted, and would
provide a vehicle, either now or in the future, for
public viewing, study or research of the President's
papers or other materials relating to his official or
personal life which have historical or commemorative
significance, as well as possible distribution of these
materials either to the government or to the other
recognized charitable organizations. Even though at
this point in time the President apparently is not in-
clined to utilize this vehicle, I think there is very
little to be lost in maintaining its existence. Annual
filings are required with various government entities,
but since the Trust has no particular activity this is
not a great burden. If it is to be continued, filings
will have to be made with the State of California,
which have not been done in the past simply because
of the lack of activity of the Trust. In any event,
further consideration should be given as to whether to
maintain this Trust in existence, and as set forth below
whether to consider its possible utilization in connec-
tion with the President's estate plan.
4.
The present trustee of the Irrevocable Literary Trust
is H. R. Haldeman. He has executed a document pur-
suant to which he appointed John D. Erlichman as succes-
sor trustee if he, for any reason whatsoever, should
cease to act. If this trust is to be continued in existence
for any significant period of time, therefore, attention
should be given as to the proper trustee, or successor
trustee.
5.
At our meeting with the President in Washington in May,
he was quite emphatic in his thought that he does not
wish any of his papers or materials relating to his public
life in any way left to the "government" at this point in
time. Accordingly, under his new Will, all of his
property, including these materials, is left for the bene-
fit of Mrs. Nixon and the children. This could, and
probably would, produce a substantial Federal estate
and California inheritance tax cost, depending on the
value placed on these items. Since valuation of the
materials would, in itself, be a difficult problem, there
could be substantial and prolonged litigation relating to
the ultimate determination of death taxes.
WILLIS, BUTLER & SCHEIFLY
General Alexander Haig
5
July 12, 1974
There is an approach which might provide some flex-
ibility in dealing with this situation, which would involve
utilization of "The Irrevocable Literary Trust".
California adopted, in 1972, a "disclaimer statute" which
allows a beneficiary of an interest under a will to disclaim
that interest, and allow it to pass to other parties or enti-
ties named in the will. The procedures are relatively
simple, and provide that the beneficiary of the interest
under the will merely files a written document evidenc-
ing the disclaimer with the court administering the de-
cedent's estate, within a specified period of time. The
property involved is then distributed directly to the next
person or entity that would otherwise have received the
property if the beneficiary had predeceased the decedent.
I would like to consider the possibility of inserting in the
Wills of President and Mrs. Nixon a provision that any
property they or the children might "disclaim" would
automatically be distributed to The Irrevocable Literary
Trust. It would be intended, of course, that they would
not plan to disclaim any property other than some of the
papers or other "public" materials. The California
statute makes it clear that a person may disclaim an
"Interest" in property, which is defined to mean and in-
clude "the whole of any property, real or personal,
legal or equitable, or any fractional part, share or par-
ticular portion or specific assets thereof
". I would
therefore feel that the family members involved could
determine those materials which they wanted to retain,
and which would thereby be distributed to them, and
those in which they might have no interest, which could
then automatically pass to The Irrevocable Literary
Trust. The result would be that any property actually
passing to the Trust would be free of death taxes, which
could materially reduce the amount of death taxes in-
volved, as well as perhaps reduce the possibility of
extended litigation over valuation of all the materials.
The Irrevocable Literary Trust contains adequate provi-
sion for the sorting, classification and other handling
of any materials distributed to it, as well as full
authority over the ultimate disposition of those materials,
as long as they are distributed either to charitable or
governmental entities. It therefore seems to me that
WILLIS, BUTLER & SCHEIFLY
General Alexander Haig
6
July 12, 1974
The Irrevocable Literary Trust might be a valuable
tool as a possible receptacle for some of the great
bulk of public papers and other materials in which
the family might have no particular interest. They
would still have the full right to receive all of these
materials if they wished, and certainly the right to
retain any particular materials they wished to re-
tain either because of their economic, sentimental
or historical value. I think this is one major aspect
of the President's estate plan which should be con-
sidered very carefully.
I have placed the foregoing thoughts on paper, primarily so all of us will
have something to refer to in connection with the remaining areas to be
considered in connection with the President's estate plan. I of course
would be most happy to discuss any of these matters personally with you
and/or the President at any time that is convenient or appropriate. Since
virtually each of the points referred to requires a personal decision by
the President, I would hope that all of them could be given some attention
within the relatively near future.
Very truly yours,
FRED L. LEYDORF
FLL:jc