Let’s look at a history of Duke University.
Doris Duke was born into wealth. Her grandfather, George Washington Duke, and then her father, James Buchanon Duke, built what became a dominant player in the tobacco industry. By the dawn of the 20th century, the American Tobacco Company was so successful, it was one of the twelve original companies comprising the Dow Jones Industrial average when it originated in 1896. It’s dominance in the tobacco industry was so great that it was broken up in an antitrust suit around the time Doris was born. You will probably recognize some of the brands sold by the American Tobacco Company or its successor companies: Marlboro, Camel, Kool, Winston, Salem, American Spirit, Lucky Strike, and most major recognizable brands of cigarettes sold today.
In 1924, Doris’ father set up an endowment of $40 million for Trinity University in Durham, N.C., in honor of his own father who had given generously to the institution. The President of the university renamed it in honor of the philanthropic family who had supported it so generously: Duke University. He also set up a couple of trusts, of which Doris and any children of hers would be beneficiaries. Doris was twice divorced and had no children. She later adopted Chandi Heffner, a 35 year old Hare Krishna. Even though Doris later wanted to disinherit Chandi, this later ended in a dispute.
Doris died in 1993 with approximately $1.3 billion in assets. You can see her Will. But, after her death, there were several disputes. One of the disputes involved Chandi, who settled with the trusts for $65 million. Another dispute concerned Doris’ executors. She had named her butler, Bernard Lafferty, who was barely literate, and United States Trust Company, as her executors. The court supervising the estate removed both of them because Bernard had squandered and mis-used the funds and U.S. Trust had failed to reign him in.
What can you learn from Doris’ mistakes? First, name appropriate people to serve in important positions. A barely literate butler, while perhaps a faithful employee, is not appropriate to manage a billion dollar enterprise. Next, Doris’ affairs did not have to be public. Doris could have chosen to use a revocable living trust. With such a trust, her affairs would have remained private.
Whether you have a large estate, like Doris, or a more modest estate, like most of us, the McGee Law Firm can help you achieve your goals and help you avoid making the many mistakes that Doris made.
Compliments of the McGee Law Firm, Attorney Brandon McGee
Written By: The American Academy of Estate Planning Attorneys