Rocker Tom Petty died on Oct. 2, 2017, leaving behind his widow and two grown daughters from a previous marriage. Tom put together an estate plan that included a trust (so far so good). He named his wife, Dana York Petty, as the sole trustee (sounds right) but stated that his daughters, ““shall be entitled to participate equally in its management.” (Ay-yay-yay)
Since they found their way into this newsletter, it’s no surprise that things got contentious. The daughters and the wife’s relationship deteriorated and the three couldn’t agree on album releases and business decisions, forcing them into probate court to fight over who’s got the power.
The ambiguous trust language is ripe for all kinds of disputes; what does “participate” mean? Why have one trustee and then tell others they have equal management? Why not make all three trustees in the first place? None of this is great estate planning.
So, what can we learn? How can we prevent an estate plan Breakdown (get it?)
If I were Tom’s attorney, I’d do things a bit differently. I think it makes sense to set up all three, wife and two daughters, as the trustees, to act together. I think these were his intentions all along. I would then set up a trust protector to sort out any disagreements regarding the management of the trust. The trust protector is intended to keep the estate disputes from going to probate court. I think of a trust protector as a safety valve, an independent third party, like a CPA or financial planner, that steps in when there’s an issue between the trustees or between the beneficiaries and the trustees. If we have three trustees to act together, a trust protector is a great idea.
Yes! It’s good to be king, but it’s also good to have an estate plan that keeps us out of the probate court. If you have any questions, please reach out.