How the LA Lakers Became a Lesson in Estate Planning.
March 28, 2017 • By John T. Dooley
Us attorneys often preach the importance of making your intentions known through careful and thorough estate planning. While it is thrilling to us, it is not often that Wills and Trusts capture the attention of the general public. However, recently Jerry Buss and his intentions for his beloved LA Lakers have become national news for that very reason.
Jerry Buss was a very successful business owner who loved all six of his children equally. Thus, like many, his primary goal in estate planning was to assure, as best he could, the continued health and comfort of his family. But he also wished for his business, The Los Angeles Lakers, to continue to thrive after his death. Jerry was an excellent manager and strategist who built the Lakers to a $3 billion dollar asset during his time as sole owner and he realized that passing equal control to each of his six children would be no way to run a business. Deadlocks, competing interests, various level of involvement are all foreseeable consequences of attempted equality and can lead to destruction of any ongoing enterprise.
Jerry, thankfully, sought and received outstanding professional estate planning advice which resulted in the Lakers being placed in a Trust under the control of his daughter, Jeanie, the child who he thought would be most capable of continuing the operation and who had been the most involved during Jerry’s life. The Trust exists for the benefit of all of the children but Jeanie is clearly vested with the power to run the team in the manner she deems best.
The importance of this clarity in the Trust language became very obvious over the last couple of weeks when two of Jeanie’s brothers attempted to wrest control of the team from her through the election of new directors who would presumably support the brothers’ points of view. There was suggested testimony of what Jerry “really wanted” and various conversations Jerry had had with the brothers, friends and Laker employees. The fight proceeded to court where the judge, relying upon well settled law, refused to listen to this offered testimony because the Trust itself clearly supported Jeanie. It has been suggested that the brothers wanted control so that they could “cash out” through the sale of the team or, at least, of their interests. This is not a result which Jerry ever wanted to see and the Trust which was prepared for him will prevent it from happening.