What Tom Petty’s estate can teach us
Tom Petty always seemed like a guy who could get along with anyone. No so, of those he left behind. His children from a previous relationship and his wife are now in a legal dispute. He passed away 18 months ago but, his family is no closer to getting their inheritance squared away. Instead, they are heading to the courtroom. Part of their dispute stems from sloppy language in his estate planning documents. And, part of the dispute stems from a failure of Tom to realistically look at how his family members get along. Both parts can teach us something important about creating an estate plan.
First, the loose language in his trust gives his wife and daughters the right to “participate equally” in the management of his artistic assets, music and the like. That language does not have a clear, established meaning in the law. That means the Court will have to interpret what that phrase is supposed to mean. It might mean ‘one person, one vote’, giving his daughters the 2 to 1 advantage over the wife. It could also mean hiring a manager and requiring unanimous votes which is apparently common in the music industry. With 95 million dollars on the line, the court battle is likely to be a long and expensive affair. The attorneys handling the trust litigation will end up with a significant portion of the inheritance. Mistakes like this are very common in Wills and Trusts drafted online or drafted by attorneys who don’t normally draft Wills and Trusts. When you don’t create Wills and Trusts everyday, you simply can’t know which common-sense phrases or words might mean something else completely in this area of law. The takeaway is make sure the person creating your Will and/or Trust knows what they are doing.
The second part, the family dynamic, is often overlooked, even by attorneys who do this every day. Obviously, Tom Petty was the glue holding this family together. Now that he is no longer in the picture, the family has fallen apart. That is a very common occurrence, unfortunately. It can be very uncomfortable to discuss, frankly and honestly, how loved ones feel about each other. The warning signs were probably present in the Petty family long before Tom’s death. From the outside, we cannot tell if the attorney did not delve into the uncomfortable topic of family disharmony or was it that Tom refused to address the issue despite warnings from his attorney. These kinds of family disputes come up not just in blended families like Tom Petty’s but also, in intact families as well. These kinds of problems can be avoided by discussing them with the attorney drafting your Will or Trust. Be aware that co-Executors, co-Trustees or co-anything rarely work well even when people get along. Uneven sharing of the work, stalemate and strife are common with this kind of arrangement. Often the best solution is to select a neutral third party to act as Executor or Trustee. The third party neutral can make decisions objectively and prevent the inheritance from becoming a means to hash out the emotional baggage that the family may have with one another. That means more inheritance for the family and less for the attorneys. Who doesn’t love that? The takeaways here are: 1) look at your family realistically, 2) hire a Marietta estate planning attorney who is willing to have conversations about feelings not just technical tax language, and 3) consider the use of a third-party neutral when family does not get along.