Media mogul Sumner Redstone – owner of CBS and Viacom- seems to have a big estate planning mess in his life. Apparently, Sumner Redstone is worth more than $5 billion, but he never created an appropriate estate plan, and the consequences may prove to be a mess.
Five Lessons from Sumner Redstone’s Estate Planning Problems
1. Avoid making life and estate planning decisions that may damage your reputation. Although none of us is as well-known as Mr. Redstone, we still have reputations among our associates. For Mr. Redstone, a lawsuit filed by one of his romantic partners made public embarrassing intimate details and talked about his decreased mental capacity.
2. Define “incapacity.” While Mr. Redstone was smart to establish an irrevocable trust as part of his estate plan, his plan did not define the term “incapacity.” If the trust does not define it, then the state must do so, and often involves lawsuits that can law for years over a single word.
3. Create a clear succession plan. Vagueness is one of the greatest enemies of your estate plan. You should be clear about who will manage your business, who will receive what property, and when and how those distributions will happen. Sometimes, these can be difficult decisions, especially if they require that you have less responsibilities. However, being clear and responsible in these decisions will help your family and avoid conflict in the future.
4. Decide now and write out what your children can do with your property once you are gone. If you disinherit children, or give them less than their siblings, they could easily decide to attack your estate plan and create some chaos. One way to limit that possibility is you can give those children some other roles that may help them feel a little better about their inheritance. Again, you want to be very clear and comprehensive, or your plan may end up in front of a judge.
5. You want to work with a professional estate planning attorney who can help you identify potential problems and create solutions to those problems that will work. Although you may not be able to predict every contention, a good estate planning attorney can help you identify many of the problems and address them before they can even become problems.
Every estate plan requires planning, clarity, and expertise. Fortunately for you, you can learn from the mistakes of others so that you do not replicate them in your own life.
*The York Times article that addressed the details of Mr. Redstone’s situation can be found at http://www.nytimes.com/2016/06/03/business/media/in-sumner-redstone-affair-his-decline-upends-estate-planning.html.