15 Apr “WASTING AWAY IN MARGARITAVILLE” UPDATE: COURT PERMITS JIMMY BUFFETT’S ESTATE TO DIMINISH OVER TRUST MANAGEMENT DISPUTE
A Florida court has recently ruled a co-trustee’s legal fees of $2 million in suing the co-trustee could be paid from Jimmy Buffett’s trust notwithstanding the petition opposition of the other co-trustee (who is Jimmy Buffett’s widow). Buffett’s widow has appealed and legal fees continue to grow resulting in the diminishment of Buffett’s trust estate. If Jimmy Buffett knew this would happen, then he would be searching for his lost shaker of salt.
Last year (in our article entitled “Is Jimmy Buffett’s Estate Wasting Away in Margaritaville due to Co-Trustees suing each other?”) we mentioned Jimmy Buffett’s trust required 2 trustees – his wife, Jane Slagsvol (“Jane”), and his financial advisor and accountant for many years, Richard Mozenter (“Richard”), were suing each other for removal as a co-trustee of Buffett’s trust worth an estimated $275 million (consisting of hotels, restaurants, cruise ships, plus property rights on Buffett’s songs). Jane sued Richard for paying himself $1.75 million notwithstanding poor financial results and that he failed to give her enough money from the trust to meet her needs. Richard sued Jane for being a hinderance to trust administration and breach of fiduciary duties. The court refused either trustee’s right to remove the other trustee since there was no mechanism in the trust as to how or under what circumstances a trustee can be removed. In retrospect, Buffett should have clarified in his trust how a trustee could be removed and how a new trustee could be appointed. Trusts often indicate who has the authority to remove a trustee and who has authority to appoint a new trustee (i.e., residuary beneficiaries, trust protector or trust advisor, etc.). Further, the drafter (attorney) of the trust should ask if removal of a trustee may be made with or without cause and that should be delineated in the trust. Usually, it is then asked if there is a need for a new trustee, then there should be clarity in the trust as to who could be the new trustee (i.e., bank, family member, CPA, attorney, etc.).
Buffett didn’t consider that his co-trustees would fail to get along. If he had known this, he would have either chosen only 1 trustee whom he thought could manage the trust or he would have clarified how a trustee could be removed. Whenever there are co-fiduciaries named (i.e. agents under power of attorney, co-executors of a will, etc.), there should be discussion of what happens if there is a disagreement. Don’t let your estate waste away in Margaritaville.
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