There are many people across California who set up a trust as part of their estate plan. Often, managing these trusts is long-term and complicated process. It is very important for people to consider the duties and responsibilities that may be required of trustees before assigning these roles.
Trustees are expected to manage a trust with integrity and to make decisions that are in the best interests of those benefiting from the trust. This can be extremely complicated, and it is not uncommon for the decisions of a trustee to be called into question by parties who do not agree with how the trust is being managed. This is the situation facing the trustees of Walt Disney’s trusts that were set up for his grandchildren and are reportedly worth a total of $400 million.
This situation is quite complicated and involves a number of different parties. But basically, Disney set up trusts for the three children of his daughter Sharon. Two of the children, Brad and Michelle, are twins and the third child, Victoria, was adopted by Sharon. At issue are the decisions that the trustees have made in regards to releasing periodic distributions to each of the children throughout their lives. Most recently, the trustees denied the payout to Brad, citing mental deficiencies and financial immaturity.
However, Brad and the family members on his side argue that the trustees’ decisions have been biased and unfair for years. For example, Victoria received her distributions even though she suffered from a drug addiction and exhibited wild spending habits. She died just a year after receiving a $20 million distribution from the trustees.
Michelle, too, has been granted her share of the trust even though she has never worked and, like her twin brother, has learning disabilities. She also suffered a brain aneurysm that has affected her mental function. Brad’s side has argued the trust is being mismanaged, citing the fact that the trustees have denied Brad’s distribution and no one else’s. Unfortunately, a judge disagreed in a recent proposed decision.
While there is much more to this particular situation, it does highlight the fact that trustees and their decisions can be heavily scrutinized, especially when there are large sums of money at stake. Beneficiaries and trustees have the right to protect themselves and their interests when the administration of a trust is called into question.
Source: Business Insider, “Inside The Weird, Sad Family Feud Over Walt Disney’s $400 Million Fortune,” Eriq Gardner, May 22, 2014