Fashion Designer Takes Uniquely Named Approach to Her Will
Get ready because this is a doozy, or more accurately, a floozy. Minkoff, founder of a global handbag and clothing empire, has a “floozy clause”—a provision in her will stating if she predeceases or divorces her husband, her assets all go into a trust for her children. This is to prevent a second spouse from gaining access to her wealth, reports the article “Fashion Designer Rebecca Minkoff Reveals She Has ‘Floozy Clause’ In Will” from mondaq.
Minkoff says her mother came up with the idea, long before she or her husband had any money. However, Minkoff counted on becoming highly successful. She maintains that she trusts her husband implicitly. She doesn’t trust what someone else might do if she dies. Her goal is to prevent her children from needing to go to court against an unscrupulous person.
While the title of this provision is admittedly unique, it’s very common for individuals to want to have specific directions carried out after their death, from wishes for the administration of their estate or distribution of assets. Some want to restrict who their beneficiaries marry or even dictate the religion of a spouse.
Another somewhat unusual provision is the Special Trustee for Hostile Acts. In one case, it was used by a mother who wanted to bring harmony to her five children’s relationship after she died. She appointed a Special Trustee to limit trust determinations to any child engaging in a hostile act. However, controlling from the grave doesn’t always work. Litigation ensued between the siblings, and the case made its way up to an Appellate Court, which upheld the provision but declined to limit the application despite the request of several of the children. This mother knew her children very well.
A provision attempting to control the religious marriage requirement can be expected to be enforced if it doesn’t impose a total restraint on marriage in general or promote divorce. On the other hand, a provision providing a financial benefit for an illegal act will always be found invalid.
Back to Minkoff’s strategy: it’s got at least one flaw. If funds or assets pass directly to her husband at some point in time and he hasn’t moved on to a “floozy” with someone five years after her death, he can do whatever he wants with those assets. A better solution would be to put the assets in an Irrevocable Trust containing the limitations and restrictions she wants.
Her plan also creates a tax issue. A gift in trust for the surviving spouse passing to the children if the spouse remarries means the trust won’t qualify for the estate tax marital deduction. There is a way around this, however. The trust can be structured so that the surviving spouse receives the net income of the trust during their lifetime.
The plan isn’t a bad one. However, an irrevocable trust might be a better way to achieve the desired end in cases like this.
There is another aspect to consider when planning to control assets after death. Children are happier when their parents are happy. If a second marriage would make a surviving spouse happier, having to live under the constraints of a “floozy clause” could create resentments and tensions within the family.
Talk with your estate planning attorney about creating an estate plan to achieve your goals while you are living and after you have passed. If controlling assets after you have passed is important to you, they’ll be able to come up with a plan. You don’t have to create a new name for it—unless your mother is as clever as Minkoff’s.
Reference: mondaq (April 10, 2025) “Fashion Designer Rebecca Minkoff Reveals She Has ‘Floozy Clause’ In Will”
