The just-released film “The Descendants” has an estate planning subplot that masterfully portrays how difficult it can be to satisfy all family members when an estate planning pie must be divided and distributed.
Matt King, played by George Clooney, is the sole trustee of a beautiful plot of virgin land in Hawaii. The property has been in his family for generations. Because of the law of perpetuities preventing a trust being “controlled from the grave” forever, the trust must be dissolved soon. King has to decide what to do with the land. On the one hand, he wants to honor what he believes the grantors wanted — keeping the land pristine. On the other hand, he faces enormous pressure from the beneficiaries, his cousins, who need the cash and want the land sold to developers.
Based on our experience, the situation depicted in the film is spot-on realistic. Whenever you have a family entity that must be distributed among family members, there’s ample potential for family conflict. Rare is the family trustee who can be objective and implement the provisions of the trust without getting rattled by the demands and complaints of family members awaiting their piece of the pie. That’s why, under certain circumstances, appointing a third-party trustee makes a lot of sense. If your family is going to hate someone, at least in won’t be a sibling, aunt or nephew, or in the case of this film, cousin.
Similar problems come up when clients have a family business and want to equitably distribute their estate. For example, let’s say Mom and Dad own a dry cleaning business and have two sons. One of the sons has worked in the business most of his life; the other has never taken an interest in it. If Mom and Dad direct the business to be sold, that effectively puts the first son out of a job. If the business is not sold, how can Mom and Dad be fair to each son and ensure that the estate is equally divided? There are several options, one of which is purchasing life insurance to compensate the uninvolved son for the value of the business the other son is inheriting.
Whenever there is a family entity that is going to flow into an estate, questions need to be answered well in advance about who is going to get what piece of the pie, when, and how. These are complex issues with enormous ramifications for family relationships, as “The Descendants” illustrates. Consult with an experienced Florida estate planning-elder law attorney.