What Can We Learn from Painter Bob Ross’ Business Succession and Estate Planning?

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POSTED ON: November 21, 2021

Business Sucession Planning
The new, buzzy Netflix documentary on the late, beloved, iconic public broadcasting TV host, painter Bob Ross—“Bob Ross: Happy Accidents, Betrayal and Greed”—documents how the artist’s son, Steve, now 55, was allegedly robbed of his late father’s inheritance by the artist’s business partners.

News AKMI’s recent article entitled “Don’t make the mistakes Bob Ross made: 4 estate-planning lessons for business owners” says that the documentary shows how Ross’ business partners Annette and Walt Kowalski profited from his talents and reputation, by taking control of his name, image and likeness. The article indicates how critical Business Succession Planning is for a business owner to protect their heirs.

Now the Kowalskis fully profit from sales of Bob Ross paint brushes, paint and other art materials; Bob Ross paintings sometimes sell for $8,000 to $10,000. Their business Bob Ross Inc., or BRI, is now run by the Kowalski’s daughter Joan. She issued a statement calling the documentary an “inaccurate and heavily slanted portrayal of our company.”

The contracts that “The Joy of Painting” host signed with the Kowalskis eventually prevented Ross’ son from getting the rights to his dad’s name, work and money. According to the film, Ross didn’t care about the business side of his enterprise. Instead, he let the Kowalskis secure favorable terms for themselves in contracts and other agreements with Ross, which they took the lead in creating. When Bob Ross Inc., or BRI, was founded in 1985, it was set up with equal partnership shares between Ross, his second wife Jane and the Kowalskis. Annette met Ross when she took one of his painting classes. Walt had retired from a career in the CIA.

The agreement said that if one of the four partners died, his or her stock in the company would be equally distributed among the surviving partners—not to an heir. Ross also signed over his name, image and likeness (or NIL) to BRI for specific business endeavors, according to court documents. However, Ross had The Bob Ross Trust, which he established in 1994. Under its terms, at Ross’ death, the interest in all rights to the painter’s NIL would transfer to his half-brother, Jim Cox, and son, Steve. However, Ross made another legal mistake: giving 51% of the interest to Cox and only 49% to his son, making Cox the executor of the trust and the person charged with carrying out Ross’ wishes.

In 1997, two years after Ross died, Cox folded to legal pressure from the Kowalskis and signed over Ross’ entire NIL to the couple. Steve Ross sued the Kowalskis in 2017, alleging the trust gave him the rights to his father’s NIL and intellectual property, but he lost the case.

Here are some lessons the Bob Ross story offers for small-business owners and, in particular, family businesses:

  1. Hire your own legal counsel. Have your lawyer draft corporation and partnership agreements to be sure your interests will be promoted and protected. If that’s not possible, have your attorney review all corporation and legal agreements you receive before you sign.
  2. Determine how shares are divided now and how they’ll be divided upon a shareholder’s death. The Ross story demonstrates how important it is to critically assess what each partner offers to a corporation and then to distribute shares accordingly.
  3. Review your last will and testament annually. Ross could have appointed his son the executor of his estate, rather than Cox, or he could have named a bank or lawyer as the executor of the trust and will and thus could have looked out for the interests of his own son.
  4. Don’t sign away the rights to your name, image and likeness. Your contracts for the business and its future should give you control over how your name, likeness and image are used. Require the approval of any use of your name, likeness, or image.  Contact an experienced Business Succession Planning attorney in Thousand Oaks with questions. Book a Call

Reference: News AKMI (Sep. 23, 2021) “Don’t make the mistakes Bob Ross made: 4 estate-planning lessons for business owners”

 

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