When Senator Dianne Feinstein’s husband, Richard Blum, died, he left a trust for Feinstein to provide for her for her lifetime. The Trustees of her Trust were long time business associates of Blum. Issues arose over claims by Feinstein that the Trustees were holding back money she was entitled to receive. Feinstein had requested reimbursement from the Trust for close to $170,000 in medical expenses and to pay for her caretakers. The Trustees refused to make the distributions requested because they concluded that Feinstein had other sources of income. This led to a Court battle to have the Trustees removed.

The widow of singer Jimmy Buffett, Jane Buffett, is now in a similar situation. Buffett left a trust for Jane’s benefit, with express provision that the trust was created “for the wife’s sole benefit of her lifetime.” Jane is a Trustee, but Buffet named his longtime financial advisor, Richard Mozenter, to serve as a Co-Trustee with Jane. The arrangement deteriorated with claims by Jane that Mozenter has refused to give her information about the Trust and the income of the Trust. Mozenter told Jane that there was not enough income to cover her expenses and advised that she “consider adjustments.” The breakdown of the relationship between the Co-Trustees has led to dueling Court battles between the Co-Trustees, including Jane’s lawsuit to have Mozenter removed.

In another case, a Trustee has withheld distributions to a beneficiary based on the Trustee’s opinion that the beneficiary was not spending her money wisely and therefore he would not make further distributions. This case is also now in Court in an effort to have the Trustee removed.

The lessons to draw include the importance of good communication during the estate planning process, including setting expectations for the Successor Trustee. Most important is to name the right person as Trustee. The job of the Trustee is to follow the terms of the Trust while respecting the fiduciary duties owed to the beneficiary. If there is any concern that the Trustee will act in a paternalistic manner or perpetuate past family dynamics, that person is not right for the job.