How to lose $20 million with poor planning.

This is the sad story of Holocaust survivor Roman Blum. Mr. Blum made a fortune, over $40 million, as a real estate developer on Staten Island. He died in 2012 with no spouse, children, or will. The scene was set for disaster.

“If you do not plan for your property after you pass away, the government and the courts have a plan for you. And, it is probably going to be much more expensive than an estate planning lawyer”

So, what went wrong?

Mr. Blum might be dead, but his estate is alive and well in probate court. This is because there was a decade-long search for relatives under New York's laws of intestate succession to see who should inherit his property. There are two claims to the property.

The first is by Maxim Shimnyuk, a 44 year-old Russian who lives in Moscow and claims to be Mr. Blum's great-grandson. The story goes that Mr. Blum married Ester Lajzerevna when he was still in Poland and they had a daughter named Hanna. Hanna died in 2001 but had a daughter named Tatyana in 1954, who would be Mr. Blum's granddaughter. Tatyana died in 2011. However, before she died, Tatyana purportedly gave birth to Mr. Shimnyuk, who claims to be Mr. Blum's great-grandson and sole heir to his fortune (or what's left of it).

The second claim is from the beneficiaries of Helen Pietrucha. Mr. Blum met Ms. Pietrucha in 1938 in Poland shortly before the outbreak of World War II. Before they could get married, they had to hide on her family farm, but Mr. Blum was ultimately captured and sent to concentration camps in Poland and Germany for five years until the end of the war in 1945. Pietrucha claims that in his last letter to her, Mr. Blum included a 'secret will' where he promised to give her his entire estate. However, the will was never filed and both witnesses have long since died. Ms. Pietrucha also died in 1999, but she left her estate to a longtime friend of hers - Teresa Musial. So, now Ms. Musial is claiming to be the rightful heir to Mr. Blum's entire fortune, since she claims he gave it to Ms. Pietrucha in a 'secret will' and Ms. Pietrucha gave everything to Ms. Musial - hence, she is the rightful owner. What a mess!

So, what happens now?

The matter has been litigated in Court for a decade. On one side, Maxim Shimnyuk claims the whole estate as Mr. Blum's great-grandson sole surviving heir. On the other side, Ms. Musial - a friend and caregiver of Mr. Blum's long-lost lover Ms. Pietrucha claims there is a secret will giving everything to Ms. Pietrucha, who then gave everything to her, so she should get the entire estate. The current rumor is taxes and legal fees have eaten HALF (that's over $20 million) of Mr. Blum's fortune. I do not know if it was Mr. Blum's plan to bequeath his fortune to the IRS and various probate litiation attorneys, but that is what has been accomplished so far.

How can this be avoided?

Many people, even those with substantial means, do not like to think about death. People think that by not acknowledging the future, they somehow can avoid the consequences. But, sure as the sun rises in the East, the future comes. So, you can either be prepared or unprepared, but time is marching on just the same. Someone like Mr. Blum should have made an advanced estate plan with estate tax planning and LLC's for his properties, as well as identified who should manage his money after his passing. However, everyone needs to have their affairs in order. Hiring a lawyer to help is not free, but it is a much better deal than hiring the government to do it after you die. Do not leave your relatives with a mess!

‍

How to lose $20 million with poor planning.