Yesterday in New York, the Last Will and Testament of reclusive copper heiress Huguette M. Clark was filed. She was 104 years old when she died and in my opinion, the contents of the Will just don’t feel right. The Will was signed and witnessed in 2005, when Ms Clark was 98 years old, and at this point her attorney cut of all lines of communication between Ms Clark and her relatives. So, what is so uncomfortable about the contents of the Will?
Firstly, Ms Clark’s family were completely cut out of her $400M fortune. That in itself may not be cause for concern, but when a 98-year-old does this, it raises a few red flags.
It is however the distribution of the money that is the real cause for concern; $33M to her nurse, $500,000 to her attorney, $500,000 to her accountant and $100,000 to her physician (who presumably will be the person to testify that she was of sound mind when the Will was written). The accountant and attorney are also named as the Executors of the estate which would allow them to claim an additional percentage (amounting to several millions of dollars) to distribute the funds according to the instructions in the Will.
Of course in New York, as in most jurisdictions there are ethics rules that prohibit a lawyer from drawing up a Will for a client and including themselves as a beneficiary. Specifically, the professional conduct rules state;
A lawyer shall not:
(1) solicit any gift from a client, including a testamentary gift, for the benefit of the lawyer or a person related to the lawyer; or
(2) prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any gift, unless the lawyer or other recipient of the gift is related to the client and a reasonable lawyer would conclude that the transaction is fair and reasonable.
It is interesting to note that nearly all articles covering this matter make reference to both the lawyer and accountant being under criminal investigation and the accountant having a felony conviction against him. What isn’t clear is whether the bequest to the lawyer drafting the Will could potentially invalidate the entire document or just that single bequest. Only a long drawn-out court case is likely to resolve this matter. One thing is known – there will be a challenge to this Will.
So, what are the lessons here for the rest of us;
- Write your Will when you are young enough to know what you are doing. The most common reasons for challenging a Will are undue influence and mental capacity i.e. not knowing the implications of what you are doing. Wills written by 98 year olds that suddenly disinherit family members to the benefit of a professional care-team will almost certainly be challenged.
- Challenges are expensive and will whittle away the value of the estate so think carefully before you choose to disinherit family members who may feel that they have a claim on your estate.
- Do not include professional advisors as beneficiaries in the Will. It undermines their credibility and opens the Will up to questions of coercion.
- Choose your Executor wisely. Your estate will probably have more value than most people deal with on a daily basis and it makes people behave out of character. If a person suddenly has a million pounds or dollars to take care of, they must have true integrity and honesty to carry out the instructions in the Will. In the case of Ms Clark, appointing convicted felons and people under criminal investigation are probably not the best choices.
It is very sad to see bitter fighting over a $400M estate; greed makes people behave in strange ways. But even if your wealth is modest by comparison, it is still worth taking sensible precautions to ensure that the people who you really care about, benefit from your bequests.