What Can We Learn From AA Founder Bill Wilson? Insights into Trusts, Gifts, and Legal Clarity

It all started with a manuscript written by Bill Wilson, the principal author of The Big Book of Alcoholics Anonymous. The book is a big deal (it’s actually called The Big Book), and the original manuscript is worth big bucks! It lays out the famous 12-step method for addiction recovery and is one of the bestselling books ever, with over 30 million copies sold in 43 languages.

Wilson maintained possession of the writing until his death in 1971. At this death, his widow, Lois, took possession of the manuscript until 1978, when she gifted it to her good friend Barry Leach (avid newsletter readers can already foreshadow that a trust would have avoided this whole mess…).

The Journey of the Manuscript

In 1979, Barry allegedly gave AA World Services (AAWS) a signed and notarized letter in which he states that he is gifting the manuscript to AAWS, but that he will retain physical possession of it until his death. The letter also noted that the gift of the manuscript to AAWS could not be made public until after his death. A copy of the letter was also provided to Barry’s named Personal Representative.

Barry died in 1985, but the manuscript wasn’t transferred to AAWS Services as was promised in Barry’s letter (who could have predicted that?), and there isn’t any evidence that AAWS presented the Barry’s Personal Representative with Barry’s notarized letter. In fact, AAWS didn’t realize they had the letter until it surfaced in 2007. It turns out Barry’s estate was a bit disorganized (another low hanging-fruit of a lesson).

Unraveling the Legal Intricacies

For twenty years, nothing was heard of the manuscript and it was sold at auction to William Shenk for $1.576 million. The seller was known only as Joseph B. an anonymous AA member (isn’t that redundant?) who said he received it from an aunt… who once knew Bill Wilson. William Shenk sold the manuscript at auction for $992,000 to the current owner, Ken Roberts.

It was Roberts that contacted AAWS to let them know that he intended to sell the manuscript at auction after he published The Book That Started It All: The Original Working Manuscript of Alcoholics Anonymous. Leading AAWS to file a lawsuit to block the sale. Shortly after, AAWS decided to drop the lawsuit, no one knows why but it could be a weak case, the staggering cost of litigation or the fact that litigation runs against AA’s tradition of staying out of public controversy. Either way, there’s plenty for us to learn.

Key Lessons Learned

The obvious lesson here is that a trust is a great tool to identify the flow of assets. With a trust, we can specify lifetime owners and then remainderman when those beneficiaries pass. Another lesson is to pick an organized Personal Representative for yourselves.

But our main lesson from this story involves the elements of a gift. Because it touches on at least three legal topics, taxation, property law and estate laws, many words have been written about what constitutes a gift and when the elements of a gift have been satisfied.

An unconditional gift made during the diver’s lifetime is called an inter vivos gift, and it is irrevocable if all 3 of the essential elements are present:

• Present donative intent (the giver’s clear intent to pass title/interest to the property to the recipient)
• Delivery (a surrender of all or some dominion and control by the donor and allowing the receiver to have possession, which may take different forms depending on the property type)
• Acceptance by the receiver.

If all 3 of these elements are met, we have a completed irrevocable gift on our hands. It’s unclear if Barry’s notarized letter would suffice the “delivery” requirement, we would have to check the case law in that jurisdiction and it’s also unclear whether AAWS “accepted” the gift adequately. Finally, the secrecy surrounding the gift, the fact that AAWS couldn’t share the fact that they received the manuscripts may also be an issue for the “present donative intent” requirement as the Courts typically don’t enjoy conditional gifts (think of engagement rings). So there you have it, we learn that manuscripts can be valuable and that you can give a gift, but you better be clear about it.