Wills & Trusts: Are You Experienced?

Jimi Hendrix was close to his brother Leon when they were growing up. They sometimes went on tour together. Jimi may have named Leon as a beneficiary of his will if he had prepared one. Instead, their father, Al, got everything when Jimi died in 1970 without a will. Al created his own will in 1973 and updated it several times, employing complex trusts to maximize tax savings for the $80 million empire of Jimi’s legacy. Leon had been a beneficiary until 1997 when he was cut out so that Janie Hendrix, Al’s adopted daughter from a second marriage, could have Leon’s share. Janie barely knew Jimi. She met Jimi just twice and Jimi died when she was nine years old. Leon sued shortly after Al’s 2002 death, claiming that Janie had taken advantage of Al’s lack of education, lack of mental capacity and reliance on her. The litigation between Janie and Leon raged on for years after Al’s death. In the end, Leon got nothing. Jimi’s assets weren’t worth much when he died. He could have made it easy for his family by leaving a simple will.

The Gift of Travel

Our clients know that the world is a beautiful place and they often include special trust provisions to fund travel as part of an inheritance. These clients want travel to be a part of their legacy. For example, the trust can require the trustee to pay up to $1,000 per year per passenger if any family member wanted to visit any other far away family member, providing adjustments for the rising cost of air travel. The fact that these trips are “free” provides a big incentive for the family to spend time together. Some gifts come with a condition that requires study in the foreign country to become acquainted with the family’s ancestral roots or encourage philanthropy by requiring volunteer work. Some fund travel to a memorial celebration in a favorite foreign country. Funding travel is these ways can encourage a broader perspective and family unity for the long term in a way that cash never can.

Savvy Succession

The richest man in Asia, Li Ka-shing, is 83 years old and he doesn’t plan to retire anytime soon. The Hong Kong-based supermarket, real estate, oil and telecommunications magnate recently announced who will run his $225 billion global empire when he does retire. His savvy succession plan divides his holdings between his two sons by business unit — a brilliant strategy for preventing the predictable epic estate battles common to co-ownership by inheritance.

About the author:

John O‘Grady, O’Grady Law Group, APC,  is the immediate Past Chair of BASF’s Estate Planning, Trust & Probate Section.