Battle Over the Estate of Artist Bob Ross Once Again Shows How Poor Planning Can Rob Family Members of Their Inheritance
The list of celebrities whose poor estate planning has created nightmares for their family is long and growing. We’ve read about Casey Casem, Tim Conway, Aretha Franklin, and Prince. Now we need to add the late Bob Ross – the PBS painter who coined the phrase “happy little accidents” and whose personality has created almost a cult following – to that sad roll call.
We learned of this controversy last year, in this fascinating article from the NextAvenue website . In that original article, business professor Kimberly Eddleston and journalist Jonas Ruzek explain that the Bob Ross saga is not about a celebrity dying without a will. Instead, it’s about unintended consequences, and how the artist’s failure to plan carefully and to pay attention to the details of his business and his legacy appear to have robbed Ross’s own son of an inheritance with an estimated value of more than $20 million.
While Ross has been gone for many years, the pain caused by careless and inadequate planning lives on. That’s why we’re bringing this analysis back for another look.
Netflix Documentary is a Cautionary Tale for Business Owners
It was one year ago when the world was re-introduced to the iconic TV personality of painter Bob Ross through a controversial Netflix documentary, produced by actress Melissa McCarthy and her husband Ben Falcone. In the documentary, which details Ross’s life and the tumult of his business, viewers learn how the artist’s reputation and talents ended up benefitting his business partners, at the expense of his descendants. The situation remains in effect today, 26 years after the artist’s death in 1995.
The documentary, which created a furor among Ross’s many fans, is worth a watch for anyone who is curious about the painter’s life and experiences, but it holds special interest for business owners in the process of making decisions that could affect their inheritances. Ross’s story is a warning against making certain key mistakes.
Control of Ross’s Company By-Passed His Son
As the NextAvenue report explains, Bob Ross’s business partners, Walt and Annette Kowalski (and their daughter, Joan), currently derive 100 percent of the profit off of the Bob Ross name and image, selling branded art materials, and marketing Ross’s paintings online for thousands of dollars. While the Kowalskis have called the documentary an “inaccurate and heavily slanted portrayal of our company” in an official statement, it cannot be ignored that the contracts Bob Ross signed with them completely and inadvertently cut out his son, Steve, from obtaining the rights to his father’s brand.
The real tragedy of this is that Steve, a talented painter in his own right, doesn’t have access to his rightful inheritance. And all of this could have been avoided if Ross had paid a bit more attention to what he was agreeing to.
Artist’s Indifference to the Business Blamed for Controversy
Bob Ross met Annette Kowalski when she took one of his painting classes, and she became one of his most ardent fans and advocates. Her husband, Walt, had just retired from the CIA.
Ross was, by all accounts, a consummate artist who painted over 30,000 pieces. But this passionate love of art was a double-edged sword, because he didn’t care much about the business side of his craft. He loved his TV show, “The Joy of Painting”, which aired from 1983 until 1994, and he also loved inspiring others to take up a paintbrush. But he didn’t pay much attention to the money. This created a perfect environment for the Kowalskis to step in as business partners, create their own terms and agreements, and easily convince him to sign them without really thinking things through.
Here’s how the situation unfolded. Bob Ross Inc. (BRI) was founded in 1985, with ownership split equally partnership between Ross, his wife, and the Kowalski couple. Under the terms of the agreement, if one of the four partners died, their stock would be equally distributed among the surviving partners. But what was missing was any consideration of transferring stock to Ross’s chosen heir, his own son. Ross effectively signed over his name, image, and likeness to BRI without giving much thought to how it would rob his son Steve Ross of his legacy.
Bob Ross’s “Safeguard” Proved Inadequate
Ross did try to put a safeguard in place, but it wasn’t enough. Ross established the Bob Ross Trust in 1994, which would give Ross’s half-brother—Jim Cox—and son Steve all of the interest in all rights to his name, image, and likeness after his death. But here again, Ross made an error. He gave 51 percent of the interest to Jim Cox and remaining 49 percent to Steve. This made Cox the executor of the trust when the artist died, and the first person the Kowalskis would target and lean on after the artist’s death.
Sure enough, Cox caved to legal pressure and signed over Ross’s name, image, and likeness in full to the Kowalskis in 1997, two years after Ross’s death. Steve attempted to sue in 2017 on the basis that his share in the trust gave him rights to his father’s intellectual property, but lost the case in federal court.
According to Ruzek’s article, “A federal judge ruled that even though Bob Ross did not explicitly transfer his [name, image and likeness, or NIL] to the Kowalskis, the many narrower contracts he’d signed with the couple before establishing the trust effectively gave them the rights. By this reasoning, the trust never had the rights to Ross’s NIL in the first place.”
Ross Saga Has Lessons for Business Owners
As is often the case when poor planning comes to light, if there’s any silver lining to this difficult legal situation, it’s the lessons others can learn from it. Rhode Island estate and business law attorney John J. Rego explains that the whole saga could have been avoided, and that other business leaders can learn important lessons from it. Here are his four big take-aways from the Ross saga:
Lesson 1: Get the Right Advice from Your Own Lawyer
No matter how much you trust your business partners, Rego advises that you have your own legal counsel whose sole purpose is to look out for your interests. If they can do the drafting of agreements and contracts, that’s ideal. If not, at least have your lawyer look over documents before you sign them.
Make sure they specialize in corporate and business law, because as Rego says, “This is not the time to ask your relative who is a divorce lawyer for some advice.”
Lesson 2: Consider What Happens to Company Shares
Don’t just take the division of shares at face-value for how it affects you now, but also consider how it will be broken down after a shareholder dies. The Kowalskis were able to become majority shareholders simply because of the way the shares were divided after Ross’s death.
Says Rego, “If Bob had sought his own legal counsel, his lawyer would have likely advised that in the event of a spouse’s death, that person’s shares would go to their spouse or to an heir of their choosing. This would have then given Bob [his wife] Jane’s shares upon her death or perhaps would have had Jane’s shares go to Bob’s son.”
Lesson 3: Review Wills and Trusts Every Year
A will is seldom a “one and done” type of deal. Relationships fluctuate and circumstances change. Reviewing your last will and testament annually can help you make needed adjustments.
To illustrate the point, Ruzek returns to Bob Ross’s example in his article: “Ross could have appointed his son the executor of his estate as soon as Steve was deemed mature enough, rather than Cox. If Steve wasn’t deemed mature enough to handle his father’s estate at the time of Ross’ death, a bank or lawyer could have been named the executor of the trust and will and thus could have looked out for the interests of Ross’ son.”
Lesson 4: Protect Your Name and Likeness
Ruzek says it best: “Never sign away the rights to your name, image and likeness. All your contracts for the business and its future should give you control over how your name, likeness and image are used. You should also be required to approve any use of your name, likeness, or image — for example, when licensing products. Without this control, the party in control can alter and use your name, likeness and image without your approval.”
The Bob Ross saga isn’t exactly over. BRI is now worth $21 million, and so far, Steve Ross has not seen one penny of that fortune. But an army of fans over 43,000 strong have started and signed a petition on Change.org to urge the courts to give Steve Ross back his father’s name and likeness rights, showing that the love for the artist is still very much alive.
While the Bob Ross story is a sad one and yet to be resolved, it doesn’t have to be the story for every business owner. A bit of attention and savvy on the front-end can pay dividends down the line for you, your business, and your descendants.
My Life, My Plan, My Way: Get Started on the Path to Retirement Success
At AgingOptions we believe the key to a secure retirement is the right retirement plan – yet statistics show that 70 percent of retirement plans fail. That’s why for nearly two decades we’ve been dedicated to the proposition that a carefully-crafted, fully comprehensive retirement plan is the best answer to virtually any contingency life may throw your way as you age. Our slogan says it all: My Life, My Plan, My Way.
When it comes to retirement planning, most people focus on one fairly narrow issue: money. Financial planning is an important component of retirement planning. However, people heading towards retirement often make the mistake of thinking that a little financial planning is all that’s required, when in fact most financial plans are woefully inadequate. What about your medical coverage? What if you have to make a change in your housing status – will that knock your financial plan off course? Are you adequately prepared legally for the realities of retirement and estate planning? And is your family equipped to support your plans for the future as you age?
The best way we know of to successfully blend all these elements together – finance, medical, housing, legal and family – is with a LifePlan from AgingOptions. Thousands of people have discovered the power of LifePlanning and we encourage you to the same. Simply visit our website and discover a world of retirement planning resources. Make certain your retirement planning is truly comprehensive and complete with an AgingOptions LifePlan. Age on!
(originally reported at www.nextavenue.org)