Learn from the Misfortunes of Copper Mining Heiress’s FortuneHuguette Clark, the daughter of William Andrews Clark, Sr. an American politician and entrepreneur of New York’s Gilded Age, died with an estate of $400 million. Two wills executed within six weeks have appeared.
By: Mark W. Bidwell 
Mark Bidwell, Attorney and Lawyer Not surprisingly, the first Will has recently came to surface by her disinherited relatives who are crying foul. Years of litigation most likely lie ahead between the beneficiaries of the first Will and the beneficiaries of the second Will. Another situation has surfaced, during the last 15 years of her life Ms. Clark was cared by her nurse, attorney and accountant. During this period her living expenses were $1 million dollars per month. Again not surprisingly, these expenditures are being questioned and an accounting has been ordered by the court and an investigation started by the local district attorney’s office. Two lessons are to be learned from Huguette Clark’s estate plan. First, freeze your will and estate plan while still of sound mind. Second, protect your person for when you are not of sound mind or body. First lesson: freeze your estate plan Incapacity does not happen overnight unless there has been a serious injury. Forgetfulness, mood swings and irrational decision making happen on occasion throughout one’s lifetime. But when it becomes standard behavior it becomes incapacity. Unfortunately, just when one is of unsound mind is not always clear or it is identified too late. Assets disappear and conflicting documents are prepared. Many times these changes are not the intent of the elder but the intent of someone else. In California this most often is called undue influence. Undue influence requires three events at the time of the Will or Trust execution. The first requirement is the existence of a confidential or fiduciary relationship between the testator and the person alleged to have exerted undue influence. In Ms. Clark’s case, her nurse, attorney and accountant were primary care givers. Each had a confidential or fiduciary relationship. The second requirement is an undue benefit to the confident, fiduciary or another person under the Will or Trust. $34 million to the nurse, $500,000 to the attorney, and $500,000 to the accountant would meet the undue benefit requirement. The last requirement is active participation by the confident or fiduciary in preparation or execution of the Will or Trust. Did the nurse urge Ms. Clark to make the change? What was the involvement of the attorney and accountant? It is not unusual for a person to want to give more money to the person who provided love and care in the elder years. The attorney most certainly had to be aware of the risk. It is not unreasonable to assume he went through great steps to guard against charges of undue influence such as retaining independent counsel to prepare the documents and engaging a doctor to test Ms. Clark’s capacity. But the situation immediately completes two of the three prongs of undue influence, that of a confidential or fiduciary relationship and an unequal benefit. As a result litigation turns on the element of active participation. This is why it is important to freeze the estate plan while one is of sound mind, usually around retirement age. Then the active participation is not an issue and the Will remains valid. Second Lesson: protect your person for when you are not of sound mind or body One million dollars each month was spent for Ms. Clark’s care. Hopefully she received quality care and most likely did. But it is also likely not all that money was used for the benefit of Ms. Clark and was diverted for someone else’s benefit. When a person has $400 million having enough money for care is not an issue. But for the vast majority of Americans any diversion of funds can leave the elder in poverty. While in sound mind take action. Identify at least two individuals who are one generation younger. Do not select brothers, sisters or friends of the same age. Most likely they will have sound mind and body problems around the same time as you. Name these younger individuals as attorneys-in- The power of attorney authorizes the named individuals to act on your behalf in all financial matters. Naturally you want to select trust worthy individuals. So during the holiday season when family and friends get together begin to assess and engage your younger friends and family members for their help in the future. The two lessons to be learned from Ms. Clark are freeze your estate plan while of sound mind and protect your person for when you are not of sound mind. http://www.bidwelllaw.com # # # Legal representation in probate courts in Southern California, the preparation of living trust and estate plans and corporate counsel to small business owners Photo: https://www.prlog.org/ End
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