Tom Benson’s Family Feud Highlights Avoidable Estate Planning Issues

New Orleans Saints and New Orleans Pelicans owner, Tom Benson, is currently involved in a family dispute and a series of judicial proceedings emerging from changes in his estate planning documents. After becoming displeased with the way his daughter—Renee Benson—and her two kids, Rita and Ryan, began acting upon his remarriage, Mr. Benson decided to strip his descendants of ownership shares of the Saints and Pelicans.  These ownership shares were provided for in trusts that Benson had created to benefit Renee, Rita, and Ryan.

However, under the terms of the trusts, removal of the shares requires that Mr. Benson replace them with other assets of equal value.  Benson has tried to fulfill this obligation, but his attempts have proven futile as the trustees have refused to accept promissory notes Benson has attempted to deliver in exchange for the ownership interest in the sports teams.  The trustees believe that Benson has not offered assets equal to the value of the ownership interests, as questions still exist as to the dollar value of the assets.

Under Florida law, if the terms of the trust dictate that a third party has the authority to control the actions of a trustee, that third-party authority may be owed deference over the trustee’s discretionary power.  See In re Celotex Corp., 487 F.3d 1320 (11th Cir. 2007). If this case was being litigated in Florida and Benson had reserved the authority to control the actions of the funds’ trustees, litigation may have been avoided.  Needless to say, a well-written and comprehensive estate plan can make all the difference when flexibility is necessary to handle previously unforeseen circumstances.

Additionally, Renee Benson feared further repercussion from her father, and she petitioned a Texas court for her father’s removal as trustee of her late mother’s testamentary trust.  Renee, as beneficiary of the trust, alleged in her petition that her father lacked the requisite capacity to manage it.  A judge recently granted the removal petition and removed Tom Benson as trustee; however, the ruling will likely be appealed by Mr. Benson’s attorneys.

In Florida, the terms of the trust or the instrument creating the trust may include specific provisions for removal of the trustee(s).  Pursuant to the Florida Trust Code, the settlor (i.e., creator of the trust), a trustee or co-trustee, or a beneficiary may all petition the court to remove a trustee.  Also, a court may remove a trustee under its own initiative.  Fla. Stat. § 736.0706(1). The court, in its discretion, may remove a trustee for a variety of reasons, including when the trustee has committed a serious breach of trust, where there has been a substantial change of circumstances, or, like in the Benson case, where the trustee is found unfit to administer the trust effectively.  Fla. Stat. § 736.0706(2).

The legal battle is far from over for the Bensons. Trial is currently set for June 2016 to determine whether the exchange of the promissory notes for the ownership shares is permissible.  Even if Benson is successful in that proceeding, his hopes of making his wife the new beneficiary of the teams’ ownership shares will require each league’s owners to vote on the succession plan before final approval is given.

This conflict is illustrative of several issues that are often overlooked when drafting estate planning documents, such as the right to amend and modify documents, the extent of the powers given to a trustee, the effect of family dynamics, and the problems that can arise when value of property is uncertain. This family feud highlights the importance of careful drafting of your estate planning documents.  For all of your estate planning needs, the experienced team at Chepenik Trushin can work with you to structure a plan that is flexible and indicative of your true wishes.  Please do not hesitate to contact us for a consultation.