If you have not yet seen Best Picture nominee "The Descendants," you should.  It is visually beautiful (set in Hawaii, what could be more beautiful than that?), very well scripted and acted, and full of life lessons–some of which relate directly to estate planning.  It also draws heavily on local talent, and it was fun to see various friends' faces on the screen, as well as well as other friend's names in the credits (including my favorite law school professor and personal hero, Randall Roth).

This recent Forbes article by Deborah L. Jacobs outlines the following lessons from "The Descendants":

  • Unearned wealth causes conflicts.  I don't completely agree with the author's point here.  In my experience, wealth doesn't cause the conflicts; conflicts arise out of the character of the recipients and the underlying tensions between them.  When fights break out over estates, there are usually deeper issues than just the money.  This does not mean that unearned wealth, if left unsupervised, cannot end up being a bigger curse than a blessing.  Some beneficiaries, by virtue of having developed bad habits and bad relationships, can be ruined by sudden wealth.  There are many ways to protect against these kinds of problems, as long as you anticipate them and put appropriate measures in place.
  • Express your final wishes.  This point is self-evident, but a shocking number of people (including lawyers) do not have written estate plans, and many people who have written plans have not updated them in years.  An outdated estate plan can be worse than no plan at all.  Remember that as things like your health, your assets, your family situation, and your philosophy of life change, your estate plan needs to change too.
  • There are limits to how long a trust can last.  Well, yes and no.  Traditional trusts are subject to an arcane precept called the Rule Against Perpetuities, and that rule plays a role in the plot of the "The Descendants."  However, the laws of many States (including the Aloha State) allow you to create so-called Dynasty Trusts that are not subject to the Rule Against Perpetuities.  When setting up a perpetual trust, however, you need to consider to what extent you want to dump money on people you will never meet.  You can see how your good intentions could be wasted.
  • Joint ownership of land can be “a train wreck.”  No arguments on this point.  Undivided interests in land can turn out to be a nightmare, particularly as those interests become fractionalized among distant family members.  This is a huge problem in families that, for several generations, have not observed the niceties of probate and orderly title transfers.  Individual family members end up owning smaller and smaller pieces of the pie until none of them is willing to pay the semi-annual real property tax bill on the land.  At that point, the county can step in and auction the land to third parties, and the family's legacy is lost.
  • Long-term trusts pose special challenges.  This is a variation on the theme of Dynasty Trusts, discussed above.  It is hard to anticipate how your distant descendants will handle the wealth you set aside for them, and it is hard for them to know and carry out your subjective wishes, even if they sincerely want to do that.
  • A trustee must be objective.  Being a trustee can be one of the hardest, most thankless jobs on the planet.  The law holds trustees to a very high standard of conduct, and an honest mis-step can possibly cause a trustee to have pay for any resulting damages out of the trustee's own pocket.  Picking your successor trustee is one of the most important things you will do when you formalize your estate plan.  Just remember that the primary qualifications are unquestionable honesty and a sincere willingness to read your written instructions and follow them.  A trustee who possesses those two qualities will probably do an outstanding job of carrying out your wishes and satisfying the requirements of the law.

Even if none of these lessons applies to you, "The Descendants" is an entertaining movie, though not suitable for the kiddies.  It is rated R for a reason.  It depicts heart-wrenching adult themes and streams of picturesque profanity that you might not want to have to try to explain to your six-year old.  

Check here for information about how a well-drafted estate plan benefit you and your loved ones.


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