As I have previously discussed, Donald Sterling lost his attempt in probate court to stop the Clippers sale. The story of Donald Sterling serves as a reminder that estate planning is not just about what happens to assets after death, but should include careful planning of what happens in case of incapacity. The Sterling case came down to whether Donald Sterling’s diagnosis of mental incapacity and Shelly Sterling’s actions of taking over the trust were proper under the family trust provisions. When a clause is written for incapacity, it is important that the grantor pick their successor carefully and remember that the person closest to them, such as a spouse, may not always be the best person to take over their business. It is also important that various possibilities are considered and specifically planned for, such as intermittent or resumed capacity.
See Darla Mercado, Donald Sterling’s Battle Holds a Harsh Lesson for Advisors, Investment News, July 30, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
