Estate Planning Saves the Los Angeles Clippers

The last few weeks have been dominated by any combination of ISIS (or ISIL, depending on who you ask), Ray Rice, Adrian Peterson, and the NFL.  From an estate planning perspective, there is not much to talk about.  Which is why I wanted to rewind almost two months to Donald Sterling.  Remember him?

Let’s refresh.  Donald Sterling was formerly the owner of the Los Angeles Clippers. Several racist conversations and remarks were recorded by his girlfriend and released to the media, resulting in public outcry, a lifetime ban from the NBA, a $2.5 million dollar fine and ultimately, the sale of the L.A. Clippers.

Despite Mr. Sterling’s stated refusal to relinquish ownership of the Clippers, his wife, Shelly Sterling, arranged a deal to sell her husband’s NBA team to former Microsoft executive and billionaire Steven Ballmer for a record setting $2 billion.

Although Sterling tried desperately to maintain control and prevent the sale, his efforts proved futile. The L.A. Clippers was formerly owned by the Sterling Family Trust of which there were two trustees — Donald and Shelly Sterling.

During a probate hearing in June, Judge Michael Levanas reviewed the Sterling Family Trust and found that its details were quite clear in allowing the removal of a trustee who had been declared mentally incapacitated by at least two experts.

According to reports from three doctors who examined Donald Sterling, the 80-year-old businessman showed symptoms of early Alzheimer’s disease and dementia. Consider the following additional details of the case:

• Within the Sterling Family Trust, there was no provision to contest the finding by two experts that a trustee is mentally incapacitated. In fact Judge Michael Levanas saw no reason the court should have been involved at all, as the language in the trust was unambiguous.
• Donald Sterling claimed his wife’s lawyers were in “cahoots” with the doctors who examined him and that she secretly conspired with NBA commissioner Adam Silver to force Sterling to sell the L.A. Clippers.
• After closely reviewing the case, Judge Levanas found no evidence of a conspiracy to defraud Donald Sterling.
• Judge Levanas ruled against Sterling in his bid to block the sale of the Clippers to Ballmer, upholding his removal as a co-trustee after doctors found he had signs of Alzheimer’s disease.
• The sale of the L.A. Clippers closed onTuesday, August 12 after a California court upheld Shelly Sterling’s authority to sell the team on behalf of the Sterling Family Trust.

One thing we can all learn from the Sterling Family Trust is the importance of drafting a comprehensive and clear estate plan. If you require assistance planning your estate or contesting a will in North or Central New Jersey, contact Alec Borenstein, Esq., at alec@bmcestateplanning.com or call 908­236­-6457 at your convenience.