Thursday, May 22, 2014
Walt Disney family feud: Inside his grandkids' weird, sad battle over a $400 million fortune
Posted by Lynne Butler
The trust for the grandchildren provides that each of them is to receive a large distribution, tens of millions of dollars, on their 35th, 40th, and 45th birthdays. One of the grandchildren (Brad) has not received his last two distributions, because the trustees say that because of mental problems he has had since birth, he can't handle large sums of money. Both Brad and his sister, Michelle, have learning disabilities but Michelle has always received her distributions, despite having addiction issues in the past.
The third grandchild, Victoria, had severe addiction problems including heroin, and lived a life that involved extravagant splurges of $5,000 a night hotels and wrecking hotel rooms. However Victoria still received $20 million on her 35th birthday. A year later she was dead. To read an article from The Hollywood Reporter with much more detail about the trusts, the family, and the lawsuits, click here.
Brad is alleging that the trust is not being administered properly because he is being treated differently from his sisters. Under usual circumstances, a trustee is required to treat all beneficiaries equally. It appears that the Disney trust specifically empowers trustees to pay one beneficiary while not paying another, but even in that situation, the test or criteria applied to the beneficiaries should be consistent.
I can't help but wonder how Mr. Disney saw this scenario playing out when he signed his will. How exactly does a person demonstrate responsibility? Did he believe that family members named as trustees could be objective and not take personal feelings into account when making that decision? If a beneficiary is struggling with addiction or a disability, perhaps it would be a better idea to leave a lesser amount to him or her.
I expect there will be more to this story in the months to come. I'll be watching it to see what lessons it provides us for writing and administering trusts. In the meantime, this case is another sad example of how badly people behave when there is a huge sum of money at stake.
The attached photo of Walt Disney with his wife and two teenage daughters appeared in the story in The Hollywood Reporter.