Trial Over Sale of NBA team Sent Back to Probate Court

July 16, 2014

Estate plans and trust management issues do not only come up after a person has passed away. There are more and more families dealing with complications that arise when a parent or loved one is suffering from mental decline or deficiency.

For example, readers may have heard about one high-profile case involving the sale of the Los Angeles Clippers. After controversial statements made by owner Donald Sterling were made public, Sterling’s wife approved the sale of the team for $2 billion, citing her right to do so as a result of Sterling’s inability to manage the trust that holds the team. After a failed attempt to change venues, the case has been sent back to a California probate court where a judge will determine whether Sterling’s wife had the authorization to sell the Clippers.

One of the main points of contention in this case stems from medical evaluations of Sterling’s mental capacity. Multiple parties, including a psychiatrist and neurologist, have testified that Sterling is suffering from Alzheimer’s. Due to his declining mental state, they argue, Sterling is not able to serve as a trustee due to medical evidence suggesting that he cannot make sound financial decisions and may be vulnerable to attempts of fraud.

Sterling has maintained that not only is he capable of managing the trust, but he also says that he could have sold the team for more money and has been the victim of underhanded tactics to discredit him. However, reported courtroom outbursts and erratic behavior may not be helping his case.

A ruling by the judge will have a significant impact on the future of the team and the pending sale. Should it be determined that Sterling’s wife had no right to sell the team against her husband’s wishes, the deal could be in jeopardy. However, even if the judge rules that Sterling’s wife was within her legal rights to act without the consent of Sterling, the sale could be delayed by courtroom hearings stemming from Sterling’s decision to dissolve the trust.

Trust issues can be extremely complicated, especially when the mental capacity of a trustee is called into question. With so much at stake, it can be crucial to consult an attorney familiar with probate litigation and trust administration matters.

Source: The Washington Post, “Donald Sterling belligerent, combative during court testimony,” Soraya Nadia McDonald, July 9, 2014

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