Your estate plan is only as good as the people who you have implement it once you are gone. When they aren’t competent, don’t pay attention to details, or decide to pursue their own interests, disaster can ensue. The latest case involves the Walt Disney estate.
By Stephen K Lehnardt
"If you can dream it, you can do it." Walt Disney shared great inspiration with the world, and no doubt with his own family. But ever since Disney passed away in 1966, problems with his estate plan have continued to mount.
At issue is a trust he left for his grandchildren. The trust itself is fairly standard in that trust principal was to be distributed to the grandchildren in stages. For one grandchild, everything went according to plan. However, for the other two, problems have arisen.
Investing Daily, in an article entitled “Key Estate Planning Mistakes You Need to Avoid,” locates the problem with a clause in the trust that states the principal could be withheld if the grandchildren lacked the “maturity and financial ability to manage and utilize such funds in a prudent and responsible manner.” The article points out that this is a standard clause in many trusts. The problem is that disagreements have arisen between the trustees and the grandchildren. The trustees say the grandchildren have learning disabilities and are unable to manage money. In addition, the trustees contend that the grandchildren are overly influenced by a stepfather. However, the grandchildren believe the trustees just do not want to lose their income from managing the trust and that the grandchildren are being punished for refusing to keep any distributed money at one of the trustee's financial firms.
From the outside, it is impossible to know whether the trustees or the grandchildren are in the right. What we can say is that whether Walt Disney simply chose the wrong trustees, or if the trustees have erred in thinking that their role extended to their own self-interest, it is extremely important to choose a trustee who will be able to cooperate with your trust's beneficiaries. Whenever litigation occurs between trustees and beneficiaries the result is an expensive attempt to correct latent problems.
There are other mistakes, other than the wrong trustees, that can derail your estate plan. Make sure you engage a competent estate planning attorney who will help you consider how best you can plan to avoid these types of issues.
For more information in Liberty, MO and the Kansas City Area about effective special needs planning and to access free information and tools to organize your estate, visit our elder law and estate planning website.
Reference: Investing Daily (July 24, 2014) “Key Estate Planning Mistakes You Need to Avoid”
Image Credit: [Public domain], via Wikimedia Commons. Original picture taken in 1938 by New York World-Telegram and the Sun staff photographer Alan Fisher and included in the Library of Congress Prints and Photographs Division, reproduction number LC-USZ62-115340.