A fight is brewing in the Manhattan Surrogate’s Court between the widow of a deceased multi-million dollar sporting goods chain founder, and the deceased man’s brother. The founder of the sporting goods empire died of cancer in 2001, but gave $70 million to his wife as part of her inheritance. Since that time, the widow and the man’s brother, who is also now the CEO of the company, have been squabbling over each other’s spending of the corporate funds.
The founder’s brother maintains that as CEO he has grown the family trust from $44.8 million to $300 million in just eight years. He also says that his brother purposely named him as a trustee of the estate to forestall the widow’s excessive spending.
The widow is now fighting back and she is suing the brother for his part in spending $7 million of corporate funds on personal luxuries. The plaintiff (widow) says that the defendant, went so far as to spend $116,250 on a steak dinner, and spent over $4,450 in gym memberships. She is also mother of three.
The brother has filed documents of his own showing that the plaintiff has paid more than $200,000 herself in gym memberships. The defendant says that the plaintiff’s suit is in retaliation for him cutting her off from the company’s American Express Centurion credit card for more than $448,000 she spent on lavish trips to exclusive resort locations over a period of five years.
This case is a classic example of how the importance of good, well-considered estate planning is often not realized until after a person’s death. There is a good chance that many of the disagreements and contentious battles mentioned in this case may have been avoided if more steps had been taken to ensure the smooth running of this complex estate. If you are facing a similar issue with a trustee or an executor of an estate, or perhaps even someone else with some fiduciary duties, you may need someone on your side. You will definitely want a representative who is knowledgeable in the arena of estate planning and can clearly articulate your goals to the court on your behalf.
Source: New York Post, “Modell’s president hits back at sister-in-law over spending” Julia Marsh, May. 03, 2014