What happens when a trustee has too much discretion?

The executors for the estate of Whitney Houston filed a petition last week to amend some of the distribution language in Whitney’s Last Will. The wording in question outlines the trust to be created for her daughter Bobbi Kristina Brown’s benefit. The executors are working to amend the Last Will to provide the Trustee with less discretion over payments to Bobbi Kristina. The petition states that Bobbi Kristina "is a highly visible target for those who would exert undue influence over her inheritance and/or seek to benefit from respondent’s resources and celebrity."

Whitney’s Last Will gave the Trustee of Bobbi Kristina’s trust liberal discretion to make payments of principal and income out of the trust for Bobbi Kristina’s benefit. Whitney’s Last Will also outlined the following series of principal payments to Bobbi Kristina: 1/10th of the principal when she turned 21, 1/6 when she turned 25, the remaining balance when she turned 30. Language of this sort is found in many estate planning documents.

In Oregon, and in most states, attorneys have a handful of ways to try to alter distributions in order to protect vulnerable beneficiaries. The text of properly executed legal documents is difficult to argue against, however, no matter how compelling or heart wrenching the story is about the beneficiary’s circumstances. The facts of each specific case determine the strategy when amending these sorts of provisions.

Whitney Houston’s estate is dealing with arguing family members, issues over control, and servicing the sizeable debt Whitney left behind. These issues come up fairly often when administering estates. My colleague Glen Goland and I will be discussing some of the practical lessons we can learn from the estates of Presidents, Princesses and Rock Stars at a 90 minute seminar in our office next week. Our meeting will take place from 7:30 to 9 AM on Thursday October 11. To register for this seminar, please contact us at events@samuelslaw.com or 503-226-2966. Space is limited, so be sure to contact us soon.

Samuels Yoelin Kantor Seymour & Spinrad LLP Attorneys in the News

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SYKS&S partners Victoria Blachly and Jeff Cheyne were recently interviewed by reporter Kerry Tomlinson for a KATU-TV (ABC affiliate) news story about “virtual assets” such as internet domain names, online content such as photos and videos, and personal accounts for email, banking, brokerage and social media sites such as Facebook. Increasingly, personal information and content is being stored online — and few people know what happens to these assets when a person becomes incapacitated or dies.

In other words, who can gain access to our “virtual existence” when we’re gone?

As previously discussed in a two-part “Estate Planning and Virtual Assets” blog post by SYKS&S partner Michael Walker, the answer can be quite complex. For more detailed information, read Part I and Part II of Michael’s post. You can also view the KATU-TV story on the station’s website

As part of the KATU-TV news segment, our estate planning team prepared avirtual assets checklist, which is posted on KATU.com


Also in the news… partner Steve Seymour was quoted in a recent Portland Business Journal article about the Oregon State Bar’s proposed mandatory mentoring program for new attorneys. The state bar’s mentoring committee is drafting a proposal that could be in place as soon as May 2011.

SYKS&S already has an organized mentoring program in place for new attorneys joining the firm.