Friday, December 30, 2016


AMERICAN CANNABIS TAXED LIKE CRIMINALS

In 2017 US cannabis companies must factor in the impact of a US federal government that is downright 420 unfriendly.

The buzz-kills at the federal level have authority to put you in jail, summarily seize personal and business assets for forfeiture, and tax your marijuana business out of existence.

Cannabis is federally illegal in the US and the party will end when marijuana companies get pinched on April 15. Bless you for trying to bring medicine to the people, but this is no joke.

The feds have mad tools to tax the American cannabis industry into the ground, and it appears that is what they plan to do.

Cannabis businesses forsaken like the
hairs in the back of the triple comb-over.
.
Photo by BostonJerrycaption
WHO AM I AND WHY SHOULD YOU CARE

I am individual investor who plays on the high risk penny stock playground. I make small, speculative purchases of high-risk micro cap stocks that show signs of value and growth.  Then I write about it. This is called the McKenzie Research Roth IRA.

(I also have a conservatively invested 401K with a different brokerage. That’s called the McKenzie Future Food Fund.)

Little companies beget bigger companies.

My investments in the Research Fund are in sums that one might ordinarily blow on dinner and movie. Fifty or $60. Sometimes I make buys so small that they wouldn’t cover a haircut (plus the $10 trade fee as a tip).

With the funds I use for the investments discussed here, I am for all intents and purposes a Crazy Hippy From Oregon.    So let’s talk about cannabis.    I have been following the international hemp and cannabis industry take shape for years, and I have had small investments in the international hemp and cannabis industries since 2015.  This is what I do for fun.

THE WAR ON DRUGS CONTINUES

Make no mistake, the US federal government is still at war against drugs. So let’s look at what they can do to you.

In American the feds are more or less set up to come in and take most of the marijuana money away, targeting growers and dispensaries with the horrible tax treatment applied to revenues gained in what remains an illegal industry.

These taxes are intended to discourage you from engaging in trafficking in illegal substances such as marijuana.

If you look up articles for US IRS section 280(e) you will find the problem explained in tax accountant terminology. This is more of a plain words discussion with some thoughts on how the US federal government will potentially stop the US cannabis market.

DEA agents at a surprise party.
During the decades-long US war on drugs, the US federal government beefed up powers within federal agencies to stop trafficking in illegal substances, such as cocaine, methamphetamine, heroin and marijuana.

Just Say No Becomes Where’s the Money


US federal agencies have spent decades discouraging trade in illegal, controlled substances throughout the US and the world. These powers were intended to apprehend and punish illegal drug dealers as well as make trafficking in controlled substances as unprofitable as it is illegal.

A photo of a juicy pot plant lifted
by screen shot from Wikipedia
and used here under a attribution-sharealike
creative commons attribution license.
 https://creativecommons.org/licenses/by-sa/3.0/ 
If you are a cannabis/marijuana grower or dispensary in the USA, you have a big problem. The problem is that the federal government still considers you a drug dealer. They’re not going to let you profit from that.

Sudden Death by Taxes

All the tools the feds need to effectively stop cannabis in its financial tracks are set contained in the United States federal tax code.

If you are a cannabis business, particularly one that touches the plant, special, punitive tax rules to your company.  They treat you badly, as if you were trafficking in endangered species antlers or something.. Basically you get the same tax treatment that is afforded convicted meth, cocaine and heroin dealers.

The IRS tax rules here were created as a form of financial punishment for drug dealers and crooks. Dope slingers and mobsters have to pay taxes if they get caught. These regulations were crafted to make illegal activities unprofitable.

State Legalization is a Joke

And the joke is on you.  If you are relying on state-level cannabis legality to legitimize your pot business, it’s hasn’t happened and the state doesn’t have authority to do it.  Cannabis will need a Federal Act of Congress to become legal and that is a long way off.  The feds are simply biding their time for now.

State legalization of cannabis doesn’t accomplish what it sets out to do. It creates an environment where normal people feel more comfortable about breaking the law, but it does not change the fact that federal laws are being broken.

Trap for the Ill-advised and Unwary

With the feds waiting until April 15 rolls around, legalized states are excited right now to regulate the hell out of pot, tax it to the max and start yelling, “Bingo.”

The feds must await word from Trump Tower.  Obama didn't want to deal with it. But on a federal level there are folks like Newt Gingrich and others who might believe it is their moral and ethical responsibility to take it back away from you.  In the meantime state legalization has become a modern tax trap that starts at the state level and ends at the federal level.

However it may seem, the states are not legitimizing your businesses, not one degree. They are helping you keep extensive records that the feds will use later to ruin you. So, while the states stand back and count their millions, marijuana business owners will be paying up voluntarily or fearing an audit, and the IRS has jurisdiction to audit for the past 10 years.

Did you write receipts for all those cash transactions?

We are at a unique point in history we have international players within the United States who are opening selling federally illegal controlled substances to the general public.  We have many US-based businesses that are in the same boat, acting in defiance of the United States government.

Banks refuse to work with cannabis businesses so they operate in cash. It is difficult to obtain financing or working capital for an illegal business, so these businesses have good numbers of small, self-funded private enterprises. Some of these businesses have operated in cash for years.

The fact that cannabis is federally illegal gives the IRS every tool they need to quickly take the fun out of the industry. The feds will do this on April 15,  2017, and they will do it again every year thereafter until there is no more tax to collect. Then they can spend the rest of the year doing audits.

Doubters and objectors can wait and see, but as 2016 taxes come due many canna-businesses will see the writing on the wall and quit or go broke. If you can’t fight city hall, why do you want to antagonize a Goliath like the United States Federal Government?

The Feds Will Not Fix This

It will take an act of congress to change this situation. Literally.  The problem is that it will not happen soon.

As 2017 turns into 2018, rational American cultivators and dispensaries will find that there is no choice but to go out of business, sooner rather than later. If logic comes into play, fewer people will thereafter be willing to grow or sell marijuana "legitimately" because there's no money in it.

As the Trump Administration takes over Washington, D.C., they will not see a problematic situation that needs to be fixed. They will see a tax situation that will fix itself and pay dividends.

They probably don’t intend to arrest and prosecute all the small operators, but Donald Trump and Jeff Sessions are not going to call in the cavalry to rescue anyone.

The State’s Two-faced Game

The state takes the first bite out of a dispensary business, typically a percentage applied to all sales at a dispensary. The state tosses out a number, whatever they eventually come up with. The dispensary then collects this state tax from its customers as a direct percentage on all marijuana sales.

The current state cannabis tax rate on sales in Oregon dispensaries is 17%. Colorado cannabis taxes run about 13%, combining a 10% cannabis tax with a state 2.9% sales tax. Washington state initially charged cannabis taxes through a three-tiered scheme where the grower, processor and dispensary were each taxed 25%, however Washington state changed this format in 2015, replacing the three-tiers with a somewhat less punitive, point of sale tax of 37%.

This creates big, new money for the states and they love it. Now they can fix roads and build schools and prisons. They love it so much that they don’t care that you are violating federal law. They also don’t care a rip that they are setting you up so that the feds can eat you alive.

Through licensing and regulation, states are formulating a model system where dispensaries are the de facto state tax collectors.  Gee, aren't the people from the state friendly?

Presenting yourself as a cannabis business to state officials essentially has the added impact of outing yourself to the feds, who will treat you on tax day as if you are a dope dealer pushing dime bags on the street AND got caught by the feds.

Basically, the state is going to make you do everything by the book, so that you pay the full amount of taxes they have imposed. This will give the feds all the information they need to tax the rest of it away from you.

State taxes are nothing. Fed taxes are the shakedown.

Limited Tax Deductions, Higher Effective Federal Tax Rates

The problem is that cannabis businesses are not allowed the full slate of tax deductions that normal businesses are allowed.

Even convicted drug dealers are afforded some IRS approved tax deductions, but the result is still a tax based on a number that more closely resembles revenues rather than income.

For example, if a cocaine dealer paid $10,000 for product and sold that product for $20,000, he would realize a taxable profit of $10,000 if he could prove that he paid the $10,000 purchase price. If he can’t provide proof of the cost of goods, the IRS might assess the full $20,000 as income.

A legal business with normal accounting practices can deduct transportation costs, telephone, labor, insurance, rent, utilities, internet and professional services and most other costs of goods. But even normal, well operated business sometimes fail to make money.

Deductions decrease reported income and increase profitability. But these deductions are generally disallowed for businesses that produce or sell illegal substances such as marijuana.

Cannabis Crunch

In a rational scenario these tax ramifications would have quashed industry growth three years ago.  But people hold onto this dream, wanting to create value out of their efforts, holding out for better times ahead.  Some would like to go back to 2014 cannabis market spike and ride to the sky again and sell more stock in the meantime or for a while longer.

In 2016 when Terra Tech (OTCMKTS:TRTC), an American cannabis company, acquired a privately held cannabis dispensary called Blum Oakland. SEC filings showed how Blum’s financials suffered year over year from an excessively high effective federal tax rate. Commentators seemed surprised by Blum’s tax bills and poor results, especially considering the fact that the dispensary had done over $10 million in sales for the past two years.

All American marijuana cultivators who follow IRS tax directives will have this same surprise on their balance sheet. There is no amount of hard work, originality, diligence or cost-cutting measures that can overcome the IRS. The only absolute solution to this problem is to not conduct a US-based cannabis business in the first place.

When in Doubt, Speak no Evil

A publicly-traded Oregon-based dispensary company, Kaya Holdings Inc. (OTCMKTS: KAYS) stated in a recent financial filing that it budgeted zero for deferred tax liability. A statement within the filing was to the effect that the company would recognize tax liability once it was assessed or imposed. KAYS financials read as if there will be no federal taxes, which creates an exceptionally cheerful outlook for a business with a potentially catastrophic tax problem. A recent press release announced that KAYS revenues had gone up hundreds of percentage points.  Investors beware, because by all appearances it seems the company has decided to gloss over some very serious federal tax issues. (The author of this article must disclose that he has previously owned shares in KAYS, but sold his position prior to writing this article.  The author must also state that he will buy and sell several stocks in this sector in 2017.)

Survive April 15 Before You Party on 4/20

KAYS is somewhat unique further in that they are vertically integrated -- they grow marijuana in their wholly owned facilities and sell it in their wholly owned dispensaries. Vertical integration might be bad news for KAYS’ shareholders, because the company specializes in the two aspects of the cannabis industry that will face the worst possible tax implications.

The long-term picture may get dire, so maybe they don’t want to talk about it, but the problems remains.

Make no mistake, the feds are in the background, and the executives at KAYS are aware of the the issue. Still, the problems discussed in this article could get ugly as federal taxes may put many owners and operators of cannabis businesses out of business with huge tax bills. You had better believe that the feds are interested in a company that has four dispensaries with its own grows to supply it.

Small, privately owned operations may see years of hard work and dreams destroyed by federal action or inaction. Either way, it is an untenable business predicament.

Real Estate Holding Companies and the Tax Burden Shift

The industry has started to react to these tax implications. A popular idea idea is to operate in an ancillary area of the industry, thereby separating your business one degree from the grows and dispensaries.

Real estate holding companies are popular because they do this, effectively shifting the burden of the taxes away from the property owner and onto a third-party tenant. The holding company can act as a landlord, operating in a way that is for tax purposes not a cannabis-related business. These holding companies are ready to assist tenants in obtaining licenses, making connections between growers and dispensaries, for advice on growing, marketing, packaging and branding. But the holding company doesn’t grow, sell or process cannabis, their tenants do and the tenant therefore bears the full brunt of state and federal taxes on the marijuana.

Whereas one might initially be thankful for a sympathetic landlord and a place to grow or sell cannabis, it would appear that the holding company is the only potential long-term play here. They will probably hold onto the real estate at the end of the day, although flagrant law violators or money launderers could face seizure or forfeiture of their property under state or federal law.

Tenant growers and dispensaries will run up huge tax bills and go out of business. Then new tenants can be found who will run up huge tax bills and go out of business. In effect, these holding companies are ideally positioned as revolving doors for people to pay rent first and pay taxes later.

It has become common in the cannabis industry for companies to advertise the fact that their business does not produce, sell or process marijuana or cannabis in any form. Instead, they only rent real estate and provide goods, services and advice to businesses that are actively engaged in federally illegal activities. They will do anything but grow and sell the weed.

An example of this holding-company business format was demonstrated by the Initial Public Offering of Innovative Industrial Products (IIPR) in 2016. Soon after the IPO was done IIPR purchased real estate in New York from Pharmacann LLC, a Canadian company doing business in the US. After the purchase, the property was subsequently leased back to Pharmacann. The transaction involved an already built $30 million, 127,000 square foot cannabis cultivation and processing center. It remains to be seen whether Pharmacann will grow cannabis there or lease the facility as a landlord.

These arrangements are advantageous to the cannabis company, as they retain capital that would have been used to purchase real estate. Thus cannabis companies in America can focus their financial resources on growth, sales and production, branding and other activities that will lead to unpayable levels of taxation.

That is the reality of this marketplace. This is what is happening. This is why the industry will not survive.

The Picks and Shovels Analysis Survives, Sort of … for a While

The only businesses in the American cannabis sector might show short term profitability are businesses that provide services, tools and supplies, and short-term financing to the industry.

Investors intent on investing in this sector should look to cannabis testing laboratories, lighting and fertilizer suppliers, and real estate holding companies if they must invest in America. Cannabis businesses are not going to disappear over night, well at least not all of them.

But the tax problems discussed here will ultimately impact American suppliers of “picks and shovels” as rational demand for these products should decrease as, in time, fewer people will be willing to accept the risk of absolute financial ruin at the hand of the federal government.

As it stands today, there is no future for the industry. The core businesses -- growing and selling -- is challenged to survive. It is stupid to play their game, and it ends badly. There is no good scenario other than, potentially a non-profit or a purely medical cannabis business until federal legality is a reality.

As it stands now, a street dealer stands a better chance of surviving the next two years in the cannabis industry. All a street dealer has to worry about is getting caught, state licensed cannabis grows and dispensaries have already turned themselves in for the right to play an expensive game.

The Big Players are Waiting in the Wings

Federal legality is exactly the reason why big players have stayed away.

Big American tobacco has not entered the cannabis industry, because it is not yet a stable, profitable market. Corporate execs know, and their businesses live or die by, the tax code. Very few legitimate companies with seasoned leadership will enter this market until it is fully federally legal.

Once full federal legalization is granted, additional American companies will jump into the market and fiercely compete with any then-existing, tax-bloated small players. That’s years away.

Go Outside

The best potential investments in the cannabis industry are foreign companies that do not have significant cannabis grow or sell interests in America.

Outside the US, governments are beginning to accept cannabis as medicine and as a legitimate industry that can create jobs and prosperity. In Canada medical marijuana is federally legal and they are moving toward recreational use legality for persons aged 18 and over. Medical marijuana is legal in Uruguay, Puerto Rico, Colombia and Israel, and it is gaining ground in Germany and other parts of Europe and the world.

Foreign countries are gearing up for medical cannabis tourism.
Many cannabis companies doing business outside of the US show promise as investments.

For example, following Canada’s Licensed Producer program tends to spotlight companies with good chances for success. Medical cannabis is legal in Canada and they working towards recreational use.

Federal Inaction and Industry Stagnation

Asking for help from the Trump Administration is laughable. Full legalization of cannabis in the US isn’t going to happen bigly or any time soon.

In the short term US citizens and businesses must be disavowed of the notion that US cannabis business are lucrative vehicles that lead to quick riches. While great risk does at times bring great rewards, the risks for US growers and sellers of cannabis are severe, nearly certain and certainly devastating.

CONCLUSION

American cannabis businesses face hard opposition at the federal level. Cultivator and dispensary businesses are subject to severe and business-threatening tax implications.

State experiments in legalizing cannabis do not give businesses the protection or certainty they need to survive. True cannabis legalization in America will occur only after the industry is federally accepted and federally regulated with minimum standards set by the US federal government.

State legalization provides a false sense of security and may entice people to engage in criminal activity that will bring federal scrutiny.

While state-level voting has showed that a portion of the American population favors cannabis legality in some forms, state measures do little else other than collect taxes, set minimum health standards, and set the table for the feds to come tax and tax the industry out of existence.

Cannabis is still illegal in America.

Mike McKenzie
© 2016 McKenzie News and Research, a subsidiary of HD News and Entertainment.

The author of this article is an individual US investor, who began studying and monitoring US-based, publicly traded cannabis companies shortly after individual states began to attempt cannabis-legalization experiments. This is the author’s own work, and the author was not compensated in any way for this research report. Where applicable the author has indicated any current or past ownership of stocks directly discussed in this article.

The opinions expressed in this article are the opinions of the author only and should not be considered investment advice nor an invitation or call to action to buy, sell or trade securities of any form. The author holds no educational degrees or professional certifications in personal finance or business, nor does the author have significant business experience in the subject-areas under discussion.

McKenzie News and Research engages in independent research and news reporting, specializing in under-analyzed small cap US and foreign-based companies operating in the US, including publicly traded cannabis stocks of the US and elsewhere. Nothing herein limits, prohibits or restricts McKenzie News from future purchases, sales or retention of the publicly traded stocks whether or not such stocks are analyzed, discussed or mentioned.

McKenzie News is an educational resource intended to assist individual investors. Investors should note that many of the stocks mentioned are small cap stocks, subject to tremendous volatility and rapidly evolving market conditions. Investors in these issues may incur partial to total losses in the subject equities Investors should perform their own due diligence before purchasing any investment of any type.

McKenzie News and Research seeks out particularly dynamic, disruptive small companies for discussion. Typically the companies featured or discussed in McKenzie News reports receive little, if any, news coverage or public analysis because they are very small, exploratory or development-stage businesses. Such businesses are typically considered by professional investment advisors and analysts as too speculative, risky or volatile to be purchased or held as investment-grade securities.

Buyer beware.

McKenzie Research Reports is a subsidiary of Hippy Dippy Entertainment. Originally founded as Blue Dog Enterprises in 2002, HD Entertainment operates as multi-channel media and entertainment company in the US, focusing on videography, research writing, and music publishing.

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Thursday, December 1, 2016

Dog Trusts - Smooth Move or Dumb Dog Trick?

DOG TRUSTS — SMOOTH MOVE OR DUMB DOG TRICK?

Happy Birthday
Tabloid headlines cry out about eccentric millionaires “leaving it all” to their pet poodle.
Gunther IV, the German Shepherd Dog, is worth $350 million (US), right? Wrong. Learn one hard fact right here — dogs generally cannot own or possess property in their own right. Therefore, common sense estate planning concepts — such as trusts and planned giving — are necessary tools for mindful pet owners.
Please consider what will happen to your dog if you go Rainbow Bridge before it does.
ECCENTRIC EXCESS OR APPROPRIATE PLANNING?

This article will focus primarily on dog trusts. Yes, these are appropriate estate planning techniques for pets as well as humans. This article will also list a veritable compendium of good and bad examples of canine trusts and bequests through history, ranging from the humorous to the outright malicious.
While we’re at it, let’s salute a few champions of canine-related philanthropy. Woof and away we go.
WHAT WOULD OPRAH DO?
Jesus didn’t own a dog. So we will have to look at the next best thing — Oprah!
No one is shocked when a mega-star like Oprah Winfrey showers her dogs with praise and top-notch everything. Photos show Oprah’s dogs snuggled together in her bed, swimming in her pool and enjoying their mistress’s mansion, grounds and airplanes. Personally, I applaud Ms. Winfrey for her outright dog love.
Winfrey has owned more than 20 dogs in her adult life, and reportedly once owned eleven dogs at a time. That’s a dog lover, one who will do whatever it takes to care for her animals.
Yet America freaked in 2007 when Woman’s Day Magazine reported that Winfrey had established a $30 million trust to ensure care for her dogs should the star precede them in death. Oprah’s camp at one point denied this report (probably because the facts were badly bent by the tabloids), but astonished-sounding headlines confounded America with another big bowser bequest story.
PETS ARE GENERALLY CONSIDERED PROPERTY
When it comes to rights and protections, pets have few. In all of the United States, the family dog is the property of its owners. So, technically, your dog cannot own or inherit anything, because your dog is, itself, property. Maybe it’s different in Italy, where Gunther IV is from, but I doubt it.
A dog’s life after you die is complicated by the fact that a dog cannot speak (advocate, negotiate or contract) on its own behalf. Basically, your dog may go to the pound and/or be euthanized if you die unless you have a provision in your will appointing and authorizing a person or agency that is ready to care for your pet should you die.
BANFIELD CHARITABLE TRUST
The Banfeild Charitable Trust, located in Portland, Oregon has a stated mission to educate hospices about the bond people have with their pets. They help homeless people feed their dogs. They help find foster homes for animals who have lost their owners.
This is an important humanitarian issue. Homeless or solitary people should not be forced to abandon pets when they enter hospice care.
However, you might be able to arrange an end of life foster home for your pets through an agency such as the Banfield Charitable Trust or an affiliated fosters. This is can be accomplished in a very simple trust. When the animal passes, one might appoint the fostering agency or a charity to receive the remaining trust funds.
DORIS DUKE AND THE ROBERT THE MUTT
Doris Duke lead a charmed and privileged life. She was classy to the end, providing well for her pets. She did it right. Ms. Duke had many interests and she was a renowned animal lover and philanthropist. She favored shelter and rescue dogs.

Duke was the only child of a fabulously wealthy hydroelectric and tobacco tycoon, James Buchanan Duke. She was often referred to as the world’s richest girl. In spite of her wealth, Duke sought adventure and knowledge. She was the first white woman to surf competitively in Hawaii, surfing under the tutelage of Duke Kahanamoku, a five time Olympic swimming medalist. Later she worked as a journalist for Harpers Bizarre out of their Paris bureau.
In 1992 she died at age 81. In her will was allocated the sum of $100,000 in trust for each of her pets, Robert the mutt, Rodeo the Shar Pei, and others. Ms. Duke made headlines in her death, as the settlement of her trust was the first animal trust settled in the state of New York. But her estate was upheld as she had it written. Her will was done from the grave. This is how it is supposed to work.
There are many other examples, however, of people who left their fortunes, or attempted to leave their fortunes, to their dogs. Not all of them had altruistic or humanitarian motivations when making the bequest.

LEONA HELMSLEY AND A LITTLE DOG NAMED TROUBLE
In some instances elderly individuals might lack a family member or friend whom they would trust to care for their pet. Perhaps the pet owner was arrogant and alienated others. Sound like anyone you know?

Leona Helmsley, the self-proclaimed Queen of New York’s Palace Hotel (aka “the Queen of Mean”), died in 2007 at the age of 87, leaving an estate valued in the billions of dollars. She left $12 million to her dog, a maltese named Trouble. She left the sum of $6 million to be split among two of her four grandchildren and disinherited the two other grandchildren with the explanation that it was “for reasons they well know.” During her life Helmsley was convicted of tax evasion and was quoted as saying that only “the little people pay taxes.”
The twelve million dollars for Trouble was later reduced by legal challenge to $2 million. Helmsley also willed several million dollars to her brother, Alvin Rosenthal, on the condition that he take care of Trouble after Helmsley passed.
The public reacted very negatively to Ms. Helmsely’s will. Trouble the millionaire Maltese received death threats. His private security bill was around $100,000 per year. When Trouble died at age 12, she was not buried next to Ms. Helmsley, as Helmsley had directed. Health regulations forbade it.

Helmsley was truly, filthy rich and had access to the best lawyers that money could buy. She probably received quality legal advice, but chose to ignore it. Instead, she editorialized from the grave, which is not a good idea. It is also generally considered bad legal drafting to disinherit someone entirely or to be vague to any degree as to one’s intent.
PHILANTHROPY BEFORE THE GRAVE
It should be said that the Helmsley Charitable Trust, where most of Leona’s money went, is presently worth more than $4 billion. The Trust makes grants to non-profit agencies throughout the world.
Other philanthropists turn their attention specifically to animal causes. Some are specifically drawn to canine causes. Below are some noteworthy dog lovers.
BOB BARKER — ANIMAL ACTIVIST AND PHILANTHROPIST
Television game show host Bob Barker credited his wife, Dorothy Jo, as being ahead of her time on animal issues. Barker followed his wife’s lead, becoming a vegetarian in 1979. As host of the television show, The Price is Right, Barker would end the show with the statement, “Help control the pet population. Have your pets spayed or neutered.”
But Barker showed his charactor by action as well as words. He became active in animal concerns after the death of his wife in 1981. He felt compelled to continue the work Dorothy Jo had started.
Barker started the DJ&T Foundation, which was named after his wife and mother, and he donated millions of his own dollars to programs that supported spay and neuter programs, animal rescues and shelters, and dog parks.
Barker’s philanthropic efforts included a $1 million gift to Columbia Law School to fund animal rights law and an environmental law clinic. In 2010 Barker gave $2.5 million to PETA, and the money was used to construct PETA’s Los Angeles offices. PETA thereafter named their new building after Mr. Barker.
Barker also contributed $5 million to the Sea Shepherd Conservation Society. The $5 million was used to secretly outfit a boat that was used to protect oceanic wildlife, most noticeably in a television show that detailed efforts to stop Japanese whale hunting in waters surrounding the South Pole of the Earth.
BETTY WHITE — A PILLAR SUPPORTING THE LOS ANGELES ZOO
Like Barker, White cemented her reputation for supporting animal-welfare agencies in the 1970’s. Since 1971 she has served on the board of the Morris Animal Foundation. Since 1972 White has served on the board of the Los Angeles Zoo Association. In the 1970’s White produced and hosted a television show called, “The Pet Set.” In the show White interviewed television and movie stars, showing the stars at home with their pets.
Ms. White is known for being generous with her money as well as her time. She makes frequent philanthropic gifts to the Los Angeles Zoo and other animal-related entities. During her lifetime, she has given hundreds of thousands of dollars, if not millions, to “the animals.”
It is noteworthy when people give so generously during their lives. Barker and White exemplify this.
MADDIE’S FUND
For the mindful philanthropist, benevolence is a cocktail best sipped before the grave. It is important, however, for anyone considering a charitable gift to consult with their financial planner and an attorney.
Maddie’s Fund advocates for and supports no-kill animal shelters. The fund has received over $300 million from benefactors Dave and Cheryl Duffield, who earned hundreds of millions of dollars in the software industry. The fund was created to honor the Duffield’s mini Schnauzer, Maddie, who died of cancer in 1997. The Duffields enjoyed the unconditional love of their pet, who lived with them during years while Dave and Cheryl were working and building wealth. The Duffields have appeared on numerous wealthy persons lists. Their donative instincts, however, seem to favor animals.
Zoozoo, the disc dog, can jump over her own name. Pamela Anderson cannot do that.

PETA AND PAMELA
Hollywood animal-loving actress Pamela Anderson, is an honorary director of PETA. Ms. Anderson personally supports a variety of charities, and she was an animal activist even before she achieved fame and fortune in the television show, Baywatch.
GUNTHER IV AND THE GLOBAL REVOLUTION — $300 MILLION
When German Countess Karlotta Liebenstein died in 1991, she left her dog, Gunther III, approximately $65 million. Gunther did not live to enjoy his inheritance. He died a short time later. Gunther’s son, Gunther IV, also a dog, then inherited his dog-father’s fortune. In the years following the bequest, the funds held in trust for Gunther were quadrupled by Gunther’s investment advisors.
Media outlets have questioned whether the Countess and the dog ever existed. Yet no evidence exists to disprove the story. The dog, Gunther IV, has made personal appearances and seems to split his time between a $5 million mansion (formerly entertainer Madonna’s home) in Miami Beach and other resort-like estates and vacation homes.
If the Gunther story is a publicity stunt, then it is an elaborate and expensive one. What cannot be disputed is that the money seems to exist and that the Gunther Corporation did purchase Madonna’s Miami mansion. Her camp confirmed that much.
Such speculation is due to the gargantuan size of the estate and the unusual provisions of the alleged will. The will provided for Gunther to have 5 human companions, who were specially selected based upon five factors — spectacularity, sexuality, wealth, notoriety and mobility. These human companions are called The Burgundians. They performed in a Miami stage show in 1999, and an Italian television show further popularized the Burgundians through a program that proposed an alternative lifestyle based upon breeding humans with the same scientific aplomb with which German Shepherds are bred.
Don’t laugh. The dog also “owns” a professional soccer team. Other dogs have had to work for their money.
MOOSE — THE DOG WITH A JOB
Moose, the Jack Russel Terrier who starred in the televison show, “Frazier,” earned (for his owner) approximately $10,000 per episode while he was an animal actor. It is estimated that Moose’s estate was valued at more than $3 million when Moose died in 2006. To this very day Moose is a fine example of a hard working, self-made dog.
MILLION DOLLAR DOG HOUSE FOR FLOSSIE THE FIRE ALARM
Flossie, a dog owned by Drew Barrymore and then-husband Tom Green, barked and scratched at her owners’ bedroom door, alerting the stars to a fire and saving their lives. In thanks, Barrymore gifted her home to Flossie. The home has been valued at around $3 million. When last researched, Ms. Barrymore and Flossie continued to share the home. Flossie is a rescue-dog that Barrymore obtained at a flea market.
TOBY — PAMPERED POODLE OR BIGGEST LOSER?
In 1931 New Yorker Ella Wendel left her poodle a fortune valued at $30 million. A succession of poodle heirs have followed, leaving the current trust recipient, Toby Rimes (yes, also a poodle), the beneficiary of a continuing trust currently valued at more than $90 million. Gee, how lucky could a poodle be, huh?
The alternative second theory is that Toby, the poodle, did not inherit a dime. Even though Ella Wendel did, in fact, have a fortune valued at greater than $30 million dollars in 1931.
The Wendels were a New York family that became fantastically wealthy in businesses involving furs and real estate. The family consisted of Ella, her six sisters and one brother. The brother ran the family business. The seven sisters lived out their lives as spinsters, cuddling lap dogs rather than boyfriends. The brother was overbearing and controlled his sisters’ lives. Rumors were that he did not want his sisters to marry because marriage would divide his business interests. By 1910 the family mansion in midtown manhattan had become surrounded by skyscrapers. One by one the sisters and the brother died, leaving Ella Wendel alone in the house with the last of a succession of poodles named Toby.
Ella was sometimes seen in her backyard, exercising Toby. Office workers would look out their windows to see a tiny, frail woman dressed in the drab clothing of a bygone era. And Toby the Poodle allegedly did not inherit a dime, as it is believed that he died in poor health a few months after his precious caregiver.
There are no known photographs of Toby.
ANIMALS SURRENDERED AFTER OWNER’S DEATH
Every day thousands of pets are surrendered to animal rescues and shelters. According to the American Humane Society website, approximately 800 pets were orphaned by the September 11, 2001, terror attacks on the World Trade Center alone. Every year it is estimated that as many as 500,000 pets are orphaned each year by the death of their human caretakers.
An elderly person’s pet may be elderly itself, making the pet a less than ideal candidate for re-adoption, almost assuring that the pet will have difficulty finding another “forever home.”
This problem has been addressed by media outlets ranging from local newspapers to USA Today. However, rather than addressing this serious problem, the real headlines go to those few very wealthy pet owners who provide well for their pets.
NORA HARDWELL — ANIMAL LOVER, RECLUSIVE SPINSTER
In 2006 United Kingdom newspaper headlines announced that Tina and Kate, two collie mix dogs from England, inherited an estate valued at approximatley $1 million (US dollars). A reclusive secretary, Nora Hardwell had no human family members to whom she wanted to leave her estate to, and she considered her dogs as family and provided that her home, her money and her five acres of land near Bath be maintained for the dogs during their lifetime.
CONCHITA — THE $11 MILLION CHIHUAHUA
Miami Beach socialite Gail Posner, the daughter of American capitalist, Victor Posner (he invented the leveraged buyout and what is now known in business as “arbitrage”) left a $3 million trust and a home valued at $8 million to her Chihuahua, Conchita, and Conchita’s canine “sisters,” April Marie, a Maltese, and Lucia, a Yorkie. In an interview Ms. Posner gave to a newspaper in Miami, Ms. Posner elaborated on the level of care she provided to her dogs. Ms. Posner’s dogs were transported to weekly puppy spa treatments in a luxury SUV. Ms. Posner’s favorite dog, Conchita, accompanied Ms. Posner on her luncheon dates. Ms. Posner also treated her dogs to expensive gifts, such Cartier jewelry.
Ms. Posner’s son, Michael Carr, was left a paltry $1 million in his mother’s will. He subsequently commenced a lawsuit challenging the will and alleging that Ms. Posner’s staff had schemed to have the money left to the dog so that they could retain their jobs.

WELL HEELED BULL TERRIERS
Fashion designer Lee Alexander McQueen committed suicide at age 42, leaving only a note that said, “Take care of my dogs, sorry, I love you.”
McQueen owned three bull terriers, Minter, Callum and Juice, and he left behind an estate valued at $26 million. He also bequeathed tidy sums to the Battersea Dogs and Cats Home and the Blue Cross Animal Welfare Society. After the dogs passed, the trust funds were passed on to an assortment of animal charities.
A WELL REWARDED RETRIEVER
Brewery Heiress Diana Myburgh obtained Jasper, a retriever mix, from an animal rescue agency. She brought Jasper to live with her and her other dog, Jason, a whippet.
Ms. Myburgh cared for the two dogs until her death in 1995, at which time the dogs were found to be the beneficiaries of a trust that contained the majority of Myburgh’s assets and free run of her 1,236 acre estate that was valued at more than $1 million.

After Jason died, Jasper became the sole beneficiary of the trust and moved in with Myburgh’s former son in law, Sir Benjamin Slade, who fed Jasper tripe, the dog’s favorite food. Sir Slade angered other beneficiaries of the trust, who were waiting to inherit the fortune, when he announced his intent to have Jasper cloned. The human beneficiaries believed that the clone would delay distribution of the trust assets to the aforementioned humans.
THE FINAL FRONTIER
Majel Barret Roddenberry, widowed wife of Star Trek creator Gene Roddenberry, left a provision in her will that left $4 million in trust to her dogs. Concerned about the quality of care, Ms. Roddenberry included a provision that allocated another $1 million in trust for a loyal employee who would provide care for the dogs for the remainder of the dogs’ lives.
Sidney Altman, who made a fortune in the bathroom fixture industry, left a significant portion of his $6 million estate to his one true love, Samantha, a cocker spaniel. Mr. Altman’s long-time girlfriend was left the sum of $60,000 per year if she cared for the now-wealthy dog. The dog inherited Altman’s Beverly Hills Mansion and a sum of $350,000 in trust. The now-forlorn girlfriend filed suit challenging the will, arguing that a human being should not be treated as less than a dog. It is believed that Samantha was a cocker spaniel, although no photographs of Samantha are known to exist.
Quaker State Motor Oil heiress Eleanor Ritchey had few friends and as a child was very close to her mother. When her mother died, Eleanor turned her love toward her canine companions. Eleanor rescued dogs from the streets and created a private shelter for lost and neglected dogs. When Eleanor died she had 150 or more dogs in her shelter and approximately $12 million in assets. The dogs were cared for at the shelter until all the dogs eventually perished. The remainder of the funds were then gifted to Auburn University for the study and cure of canine diseases.
In 1909 Ann Dier had ammassed a fortune of $25,000 (roughly $500,000 in today dollars). Unfortunately, Ms. Dier’s husband shot and killed her. In her will Dier left her estate to a couple she had befriended, willing that at least most of the money be spent on her dog, Flossie. Some speculate that Ann knew her husband’s motives, and that she changed her will to spoil his evil plans.
SIT RIGHT BACK AND HEAR A TAIL …
Actress Natalie Shafer made her first fortune portraying Lovey Howell, the wife of Thurston Howell, III, on the 1960’s television show, “Giligan’s Island.” Ms. Shafer was once married, later divorced, and did not have children.
She invested her television-show money in real estate, making herself a multi-millionaire. Later in life Ms. Shafer lived with her Gilligan’s Island co-star, Dawn Wells (“Maryanne”).
It has been debated whether Shafer left her millions to her dog or to Ms. Well. Ms. Wells won’t dignify the question with a response. During her lifetime Ms. Shafer showed her humanitarian nature by funding the remodelling of a wing at Motion Pictures and Television Actors Hospital. Another bequest provided a $1.5 million to the Lillian Booth Elderly Actors’ Home.
ALL TO THE DOG
English university professor, Dr. Christine Gill, discovered after the death of her parents that their wills left their 287 acre North Yorkshire farm to the surviving spouse and after the death of both the farm became the property of the UK’s Royal Society for the Prevention of Cruelty to Animals. Doctor Gill sued to challenge the will, arguing that her father was a bully who forced her mother to agree to the terms of the will. Attempts at settlement were not successful and the matter became an all-or-nothing court battle. After four years of legal action, including a trial and appeal, the challenge was successful.
The estate was valued at approximately $3 million (in US dollars). Ms. Gill won and the animals lost.
This is another example of why a person should never be written out of a will entirely. It is easier to defend language that leaves someone $500 and an old watch, rather than defending language that disinherits a blood relative entirely.
(Mike McKenzie is a writer/songwriter residing in Portland, Oregon. Mr. McKenzie has been a professional disc dog performer for the past 15 years and is a founding member of the non-for-profit entity WOOFD2. Mr. McKenzie’s Youtube channel can be found at THIS LINK.)
All rights reserved (C) 2015 Mike McKenzie, Hippy Dippy Entertainment