J. Kelly Kennedy, Attorney/CPA, PLLC

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Attorney and CPA

Millionaire heiresses' mother in legal battle with trustees

When Florida residents execute a will, they appoint someone as executor to handle business matters related to closing out the estate. When all the outstanding debts are paid and all the beneficiaries have received their inheritances, the executor's work is done. When Florida residents set up a trust, they must appoint a trustee, whose trust administration duties continue as long as the trust exists.

A trust set up for the benefit of twin heiresses has been the subject of an extended court battle between the girls' mother and the trustees who were appointed to look after the girls' inheritance. The girls, heirs of the famous philanthropist and tobacco heiress Doris Duke, have trusts worth a reported $14 million for each girl. They will receive their full inheritance, which will be worth an estimated total of $500 million, when they turn 21. The girls' mother apparently has authority to withdraw funds from the trusts on an emergency basis, but the trustees argue that she has abused that right by taking more than $1 million for her own benefit.

The trustees took action in court, arguing that the mother tried to use the girls' money to buy herself a $29 million ranch and other property. A court ordered her to answer their accusations, but the mother reportedly skipped a scheduled hearing in late June and has been avoiding process servers who are trying to get her to appear again.

Trusts can be powerful tools for preserving a family legacy and for avoiding the costs and delays of probate. However, they can lead to conflict between trustees and beneficiaries, and between groups of beneficiaries. The trustee has a duty to maintain the trust principal; the beneficiaries may have disputes with each other or with the trustee.

Florida residents who are considering setting up a trust, either as part of their will or to take effect after their passing, should get help considering all the variables and possibilities. Trusts require a great deal of planning to ensure that they minimize conflict while preserving family assets.

Source: NJ.com, "Report: Doris Duke heirs' mom, accused of draining daughters' trust fund, trying to avoid court," Meghan D. Hodgin, July 10, 2013