It happens in even the most privileged of families. An aging parent is suffering from failing health. Unfortunately, no planning for incapacitation was ever put in place by the parent to name someone to look after his or her best interests.
A French judge recently ruled that L’Oreal heiress Liliane Bettencourt, 88, be placed under the guardianship of her daughter and two grandsons (http://tinyurl.com/6cr3f3d). A medical report declared that Bettencourt suffers from Alzheimer’s disease.
Family Feud
The court-appointed guardians are relatives, so this should be a peaceful transition of power, right?) Not in this family – and maybe not in your family. The reality is that Bettencourt and her daughter are estranged. They’ve had a series of lawsuits over the matriarch’s spending.
Their fight for control over the family fortune has the daughter claiming that Mrs. Bettencourt is mentally unfit to manage her money. The aging matriarch is thought to have given a celebrity photographer about 1 billion Euros worth of gifts over two decades. There are also claims of illegal donations to President Nicolas Sarkozy’s 2007 campaign.
This Could Have Been Avoided
Whether Bettencourt is fit to manage her spending isn’t really the key talking point here for people who need a planning strategy.
A Living Trust would have allowed Bettencourt to name a Trustee – or at the very least, tell a court her first choice for a Guardian or Trustee in the event of her incapacitation.
Instead, the judge named her daughter – probably the last person Bettencourt wanted to manage her life and finances – and her grandsons.
Keep the Private from Going Public
If Bettencourt had simply created a Living Trust, then this sensitive battle within her family over her spending would likely have never been heard in a public venue.
In the absence of proper estate planning, which includes provisions for incapacitation, a court will name someone as a Guardian or Trustee. You can avoid this by asking a few questions and finding an estate planning attorney.
Have you decided who you want to manage your affairs in the event you become incapacitated? Do you have any relatives who might accuse you of being unfit? Who do you really trust?