Wealth, fame, and celebrity often come with a price. One of these is a loss of privacy resulting in the public airing of sometimes very dirty laundry. Nowhere is this seen more than where money and inheritance are involved. Beginning this month, I will feature a weekly story in what I call Tales from the Estate Planning Crypt – not so that the rest of us can gloat or think that this will never happen to us – but because they do happen everyday to normal people like us. And, perhaps we can learn something from these stories so that we can make better estate planning decisions. We can help you walk through the difficult and murky waters of planning for the contingencies that these stories represent. Don’t wait for your story to appear here!
Walt Disney heirs embroiled in ugly family feud
Walt Disney World is a great vacation spot and a wonderful way to spend the holidays. Walt Disney passed in 1966 at the age of 65. He left behind two daughters and 10 grandchildren. One of his two daughters, Sharon Mae Disney, had married and then divorced a real estate developer named Bill Lund. Lund was the man who located and helped select Orlando, Florida as the site for Disney World. Sharon and Bill had twins, born in 1970, named Michelle and Brad. Sharon created trusts to pass on her share of the Disney fortune to her three children (her other child was from a prior marriage). Under the trusts, the twins were entitled to substantial distributions. How substantial? In additional to yearly distributions of around one million dollars, they can each receive larger amounts, every 5 years, of approximately $20 million. However, the larger payments would only be made if the trustees determined that the beneficiary was competent to handle the money. Before Sharon died, she selected her ex-husband, Bill, as one of the co-trustees for the twins.
In 2009, Sharon and Bill’s daughter, Michelle, suffered an aneurysm. Bill moved her from California to Arizona, where he lived, so he could care for her. Family members and friends of Michelle launched a court battle to remove Bill, claiming he acted against Michelle’s wishes in moving her and even trying to isolate her from family and friends. Not very Disney-like! Eventually, Michelle partially recovered from her condition. When she learned what her father had done, she became angry with him. She requested that other people be named as her guardian and conservator to make decisions for her as she continued to recover, and she did not want to be under the control of her father or his wife (Bill had remarried, and Michelle apparently did not care for her stepmother … sounds almost like an old Disney movie).
During that court process, co-trustees of Michelle’s trust learned that Bill had entered into secret land deals on behalf of the trust. More troubling than that, he also personally profited from the deals … which was not permitted under California law. So the other co-trustees started a second court proceeding, this time in California, seeking to remove Bill as a trustee. Bill initially fought the removal efforts. He claimed the land deals brought in a lot of money for the trust. Eventually, citing his own poor health, he agreed to resign (in exchange for yearly payments of $500,000). But that hasn’t ended the family feud. Now Michelle and other family members are again battling her father, Bill. This time, the fight is in an Arizona probate court and centers around Michelle’s twin brother, Brad, and his trust money.
Brad is developmentally disabled. He lives next door to Bill and his wife, and Michelle claims that an independent guardian and conservator is needed to protect Brad from, among others, the (evil?) step-mother. Brad says he’s happy with Bill and his wife managing his affairs and his money. He’s upset with his money being used to pay expensive lawyers for the guardianship fight, and he wants the court process ended. The battle has gotten so heated that the Arizona judge overseeing the case actually sent one of the lawyers involved (representing Michelle and other family members) to jail.
As many families can attest, there is something special about that Disney magic … too bad it’s not special enough to keep his grandchildren from ugly battles in court!
-David Russell, CFP
Disclosure: This report is intended to serve as a basis for further discussion with your other professional advisors. Although great effort has been taken to provide accurate numbers and explanations, the information in this report should not be relied upon for preparing tax returns, legal documents, or making investment decisions. If investment returns are included with this report, the assumed rates of return are not in any way to be taken as guaranteed projections of actual returns from any investment opportunity. The actual application of some of these concepts may be the practice of law and is the proper responsibility of your attorney.