What Lessons can be Learned from the current Hearst Legal Battles
As I was reading the latest news about the ongoing legal battles over the control of Phoebe Hearst Cooke's assets (estimated between $1.5 and $2 billion), I couldn't help but think that in so many ways her story, even though larger in scale and scope, might be the story of many families dealing with an aging parent. Worries about whether there is elder abuse by a caregiver, or how assets and money are being managed, and if an outsider might easily take advantage or control of the elder person's assets--should be on the mind of many families, especially here in the desert with a population that tends to skew to the older age group.
To briefly summarize recent events, as reported in a Los Angeles Times article--Phoebe Hearst Cooke, the granddaughter of publishing legend William Randolph Hearst, is at the center of legal actions filed by relatives who contend the 81-year-old no longer has the capacity to manage her own affairs. Currently, the only daughter of the heiress--Phoebe "Misty" Lipari, 56--is one of the relatives seeking conservatorship for her mother.
Here are some of my thoughts and lessons on what can be learned from this case:
- Include in your estate planning documents how a trustee is to be judged mentally competent.
- And there should be documents in place that specify to what affairs may an agent act--for example you may want to have different agents that act for health care issues from the agents that act for financial matters.
- In the case of a trust situation--there should be successor trustees that are nominated and can act in the case of incapacity by an elderly trust-maker.
- Put in place asset protection strategies--to protect beneficiaries at the time of the distribution of assets (such as in the case of a lawsuit or divorce).
- If charitable giving is part of your legacy, create endowment fund(s) for specific charities, with specific dollar amounts including your hopes and desires of how those funds are to be spent. For example, if a specific non-profit institution doesn't exist in 10 years, would you like those funds to be distributed to another charity with the same goal?
- Finally, a great idea for an elderly person, and maybe close family members, is to create a personal inventory of the things in their home, ideally through a trusted personal property appraiser. This step is an important one as it can serve as proof of important family heirlooms, antiques or paintings--especially if they are stolen or missing when elder abuse is suspected. Personal property appraisers can document and photograph the items--and assess potential value. This way the family has some protection in place, and will know for sure if items are missing after the death of a relative--or during the incapacity.
