How to make a mess of an estate plan:[1]
Remember Leona Helmsley, the woman who wore gorgeous gowns advertising her hotels?
She died at age 87 nine years ago. They are still fighting about the estate she distributed under her “Last Will and Testament.” In that Will she gave most of her estate to charities, some to a brother and two grandchildren, as well as $12 million to her dog, Trouble (the court reduced Trouble’s share to $2 million).
The fights about her estate continue. One fight was from two grandchildren who were disinherited. They raised a commotion and ended up getting $3 million each from her assets. The current fight is about the “astronomical” fees being charged by four men who are the administrators of her estate. They want to be paid at the rate of $6,000 per hour! A New York judge will decide their fees.
Part of the problem stems from the Will’s lack of clarity.
What could she have done differently to come up with a plan that truly reflected her wishes?
- She could have been more specific about how to pay the administrators of her estate.
- She could have appointed a professional administrator, rather than two grandchildren, one of her lawyers and a business advisor the four who are charging at the rate of $6,000 per hour.
- She could have had her estate administered under a Trust agreement, rather than a Will. Often Trusts include “no contest” language, which makes it difficult for others to change the distribution, so the disinherited grandchildren would receive nothing.
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[1] “New Fight of Helmsley Fortune”, Peter Grant, The Wall Street Journal, Friday, January 22, 2016, page A2.
