If you can get past the swooning over George Clooney, this year’s five time Oscar nominee “The Descendants” is really about estate planning. In the movie plot, Clooney’s character’s ancestors left valuable Hawaian real estate in a trust, of which Clooney’s character is a beneficiary and the trustee of the trust. The trust is about to end, and George Clooney’s character, King, as the trustee, must decide whether to sell the land to a developer make him and his cousins all very wealthy, or keep the pristine Hawaian property in the family.
The movie is based on a book by the same name that was written by Kaui Hart Hemmings, a Hawaian who was actually involved in the sale of land that was in a trust from her ancestors. She talks about the movie, working with George Clooney, and her family’s inheritance of Hawaian land with Forbes, Deborah Jacobs, in this article.
The plots and sub-plots in the movie raise a number of estate planning issues that arise in almost all families, regardless of wealth.
One of the first issues brought to the surface in the movie is the degree to which unearned wealth brings conflict: from the perspective of “selling out” the land and its heritage, conflict between and among the descendants over whether to keep the heritage or convert it to spendable wealth, and, perhaps most importantly, the degree to which an individual desires to provide unearned wealth for their own descendants. King (Clooney’s character) phrases it this way: “I want my children to have enough that they think they can do anything, but not so much that they know they can do nothing.”
Another interesting estate planning issue arises out of the fact that the trust is ending. Most people do not know that a trust, at least in most states, cannot last forever. The “rule against perpetuities” provided by state statutes typically determines when a trust must end, and the principal of the trust be distributed to its beneficiaries. Some states have extended the rule against perpetutities, and a small handful of states have eliminated the rule against perpetuities so that a trust could literally continue in perpetuity. In Florida, a trust is allowed to remain in existence and operating for up to 360 years.
There are a number of other estate planning issues that are central to one or more of the movie’s subplots.
For instance, King’s wife has suffered a horrible injury in an accident. She has no advance directives in place to communicate what kind of end of life decisions should be made on her behalf. A living will or other advance directive could eliminate much of the uncertainty and conflict surrounding her ultimate treatment and outcome. She also could have prepared a health care power of attorney naming the person(s) who should make decisions on her behalf when such circumstances are present.
King is the sole trustee of the land trust involved in The Descendants. The movie script doesn’t tell us whether he is serving in that capacity having been specifically identified in the trust document, or whether the other family members who are beneficiaries of the trust chose him to serve – perhaps because he was the “lawyer” in the family.
Chosing trustees and providing for the succession of trustees over a long period of time is usually one of the most important considerations made by the person who establishes a trust. The choice between individual and corporate trustees, whether to have one or more trustees, and specifying how successor trustees are to be selected can be critical to the successful administration of a trust over time.
Another significant estate planning issue that is addressed in The Descendants is the “fiduciary duty” that a trustee owes to the beneficiaries of the trust. In The Descendants, this issue arises out of the discussion between King and his cousins who want the property to be sold, making them all very wealthy. When King decides not to sell the property, but to keep it intact, he states to one of his cousins that the cousin can sue him (King/Clooney) if he is unhappy with the decision.
One last estate planning issue that is brought out in the movie is the potential problems that can arise out of joint ownership of property. In discussing the option of refusing to sell the property out of the trust to the developer, King agonizes over the fact that he and all of his cousins will own the property jointly.
Joint ownership of property usually means the individual joint owner has no control over what is done with the property, cannot sell or mortgage the ownership interest unless all of the other joint owners agree, and may not be able to transfer the property interest as desired either during life or at death. It also means that unknown third parties may become your “partners” in the ownership of the property through divorce or because of creditor claims by your partners’ creditors.
So when you watch the Academy Awards program this weekend, and they start handing out the Oscars, be sure to remember that The Descendants is really about estate planning!
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