Dolly Parton spent decades building much more than an extraordinary music career. She created a business empire, an instantly recognizable brand, valuable intellectual property and a philanthropic legacy that will likely continue for generations.
By all appearances, she also took planning for her legacy seriously. Yet shortly after her death, a very public dispute erupted involving her estate-management organization and one of her own family members.
That raises an important estate planning question:
What happens when you appear to do everything right, but after you are gone, a family member refuses to accept the decisions you made?
The answer illustrates something we frequently discuss with clients, particularly those with larger estates: Estate planning isn't only about deciding who receives your assets. It is also about deciding who will be in control when you are no longer there to protect the plan yourself.
What Is Happening With Dolly Parton's Estate?
According to publicly reported court filings, a dispute has developed between She's Alive, the entity responsible for managing and protecting Parton's business interests and legacy, and her nephew, Bryan Seaver.
Seaver was not a distant relative. He reportedly served as Parton's head of security for more than 20 years and was personally selected by Parton to announce her death. After Parton's death, however, the relationship between Seaver and those managing Parton's interests deteriorated dramatically.
She's Alive has accused Seaver and his security company of making threatening and intimidating communications and demands for money. A Tennessee court issued a temporary restraining order against Seaver and his company. Seaver has disputed the estate's characterization of his statements and has said that certain comments were taken out of context.
Because the litigation is ongoing, we do not know how these allegations will ultimately be resolved. But from an estate planning perspective, the situation presents a fascinating lesson.
Even a Very Good Estate Plan Cannot Control People
Clients sometimes believe that if their estate plan is drafted correctly, there will be no family conflict after their death.
A trust can:
- specify exactly who receives property
- identify who serves as trustee
- establish who controls a family business
- create rules governing distributions
- provide succession plans for trustees and other fiduciaries
But a trust cannot prevent someone from becoming angry or prevent a disappointed family member from making legal demands or contest claims. And it cannot guarantee that someone will not file a lawsuit, make accusations, challenge the people in charge or publicly criticize the family or estate.
That is why sophisticated estate planning should consider not merely "Who gets what?"
It should also consider:
"What happens if someone doesn't like my decisions after I'm gone?"
1. Be Very Deliberate About Who Has Authority
One of the most important decisions in an estate plan is choosing who will be in charge. For a relatively simple estate, a responsible adult child may be an excellent successor trustee.
For a $10 million, $20 million or larger estate involving businesses, substantial investments, intellectual property or complicated family dynamics, the answer may be different. There may be good reasons to consider an independent or professional trustee, co-trustees, a trust company or another structure that separates certain responsibilities.
The person who loves your children the most is not necessarily the person best equipped to withstand pressure from them. Your fiduciary may eventually have to say "no" to someone you love. Choosing someone who is capable of carrying out this role is an important decision that takes thoughtful consideration.
2. Separate Family Relationships From Business Control
Dolly Parton's situation also illustrates an issue that can arise in successful families: a family member may simultaneously be a relative, employee, advisor, beneficiary or business participant and those roles can become blurred.
During someone's lifetime, the founder may be able to manage those relationships personally. After the founder dies, that stabilizing influence disappears.
A well-designed succession plan should clearly establish who controls the business, who controls the trust, who can hire and fire employees and advisors, and what authority, if any, individual family members have.
Someone being a beneficiary of a trust does not necessarily mean that person should participate in managing the trust or the underlying businesses.
Those are very different roles.
3. Consider the Possibility of a Difficult Beneficiary Before There Is a Problem
Families sometimes avoid discussing this because it feels uncomfortable. But if you already know that a child, sibling, niece, nephew or other potential beneficiary has a history of conflict, financial problems, litigation, substance abuse, difficult relationships or unreasonable demands, that information should be part of the estate planning conversation with your attorney.
It doesn't necessarily mean disinheriting that person. Instead, the trust can potentially be designed so the beneficiary receives appropriate benefits without receiving control such as:
- Assets might remain in a continuing trust rather than being distributed outright.
- An independent trustee might control distributions. (Such as a bank, Private Fiduciary or Trust Company.
- The beneficiary might be specifically excluded from serving as trustee.
- Additional fiduciaries or trust protectors may be appropriate in certain sophisticated plans.
The key is recognizing the potential problem while the person creating the estate plan is still alive and able to plan for it.
4. Give Your Fiduciaries the Tools to Defend the Plan
A trustee should not merely inherit responsibility. The trust should provide the trustee with sufficient authority to carry it out.
Depending upon the circumstances and applicable law, that may include authority to retain attorneys, accountants, investment advisors, security professionals and other experts; defend litigation; protect trust property; manage business interests; resolve disputes; and pay appropriate expenses associated with administering and protecting the trust.
For significant estates, these provisions can become extremely important. The question isn't simply, "Who will be my trustee?" it is also, "Will my trustee have the legal and financial tools necessary to protect what I built?"
5. Consider a No-Contest Clause but Understand Its Limitations
California estate plans sometimes include no-contest clauses intended to discourage beneficiaries from bringing certain legal challenges. But these provisions are not magic. California law significantly limits when a no-contest clause can be enforced, and careful legal analysis is required before relying upon one. Challenges regarding undue influence and/or capacity of the trust Grantor are commonly outside the non-contest clause.
More importantly, a no-contest clause does not necessarily prevent someone from creating disruption outside a traditional trust contest. That means no-contest provisions can be one part of a strategy, but they should not be viewed as a substitute for thoughtful fiduciary selection and good trust design.
6. Think About Your Reputation and Legacy as an Asset
This lesson becomes especially important for business owners, authors, entertainers, entrepreneurs and families whose name itself carries value. For most families, estate planning focuses on houses, investment accounts, retirement accounts and businesses.But some people leave behind another valuable asset: their reputation.
For Dolly Parton, her name, image, music, business relationships and philanthropic reputation are inseparable from the economic value of what she built. The same principle can apply on a smaller scale to the founder of a family company, medical practice, professional firm or other closely held business.
If your name is connected to the enterprise, succession planning should consider not only ownership of the company but also who will protect the reputation associated with it.
7. Communication During Life Can Help but It Cannot Eliminate Conflict
Families with substantial wealth sometimes benefit from discussing the broad structure of an estate plan before death. That doesn't necessarily mean telling every beneficiary exactly how much he or she will inherit. But explaining why certain people were selected as trustees, why assets will remain in trust, or why control of a family business will pass to one person rather than another can sometimes reduce surprises.
However, even excellent communication cannot guarantee harmony. Ultimately, a good estate plan needs to work even if everyone does not get along.
The Most Important Question: Is Your Estate Plan Designed Only for the Best-Case Scenario?
Many estate plans work beautifully if everyone behaves reasonably.
- The children cooperate.
- The trustee acts responsibly.
- Beneficiaries respect the trustee's decisions.
- No one makes unreasonable demands.
- No one challenges the plan.
Unfortunately, families do not always operate that way. For clients with significant wealth, businesses or complicated family relationships, we believe estate planning should also ask:
What happens if things go wrong?
- Who controls the assets?
- Who can remove and replace a trustee?
- Can a difficult beneficiary obtain control?
- Who controls the business?
- Who has authority to hire attorneys and other professionals?
- Can assets remain protected in trust?
- What happens if someone attempts to interfere with the administration?
Those questions can be just as important as deciding who receives the inheritance.
The Lesson From Dolly Parton's Estate
It would be premature to draw conclusions about who is right or wrong in the current dispute involving Dolly Parton's estate. The allegations are being litigated, and the public does not know all of the facts or the complete terms of her estate plan.
But there is already an important lesson for families. Even extraordinary estate planning cannot guarantee extraordinary behavior from everyone left behind. You cannot completely prevent someone from becoming angry, making demands or challenging the people you selected.
What you can do is build an estate plan that anticipates the possibility of conflict by choosing strong fiduciaries, clearly define authority, separate beneficial interests from control when appropriate, give trustees the tools they need to protect the estate and plan for difficult family dynamics before they become a crisis.
And for families with significant wealth, consider not only how your assets will be distributed, but also who will protect everything you spent a lifetime building after you are gone. That may ultimately be one of the most important parts of your legacy.
If you, a friend, or a loved one would like to discuss estate planning or have your current estate plan reviewed, contact our Intake Department at 760-448-2220 or visit us online at www.geigerlawoffice.com/contact.cfm. We proudly serve families throughout California from our offices in Carlsbad and Laguna Niguel.
