What Jimmy Buffett’s Estate Fight
Teaches Every Family About Trusts
Jimmy Buffett, best known for his iconic tropical rock hit Margaritaville, passed away from cancer in June 2023 at the age of 76. He is survived by his wife of 46 years, Jane, and their three adult children. Beyond his music career, Buffett was also a savvy entrepreneur. He built a business empire around his laid-back brand, launching a clothing line, a cruise line, and becoming a part-owner of several minor league baseball teams. He also founded Margaritaville, a hospitality company that runs a network of restaurants, resorts, bars, and casinos.
When Jimmy Buffett died on September 1, 2023, most headlines celebrated his remarkable life and business empire. Less visible was the estate plan behind it – controlling about $275 million in a marital Trust for his widow, Jane.
He designated her as a Co-Trustee and chose his longtime friend, accountant, and financial advisor, Richard Mozenter, to serve with her in the role of independent Co-Trustee. Buffett apparently believed Jane lacked the skills necessary to manage such large and complex assets on her own. Although he put considerable effort into creating a solid plan, the situation has deteriorated significantly. Tensions between Jane and Mozenter are high. Earlier this year, public reports revealed that they had taken legal action against each other, with both accusing the other of mismanaging the Trust, poor investment performance and excessive trustee fees, and attempting to remove the other.
Below, we translate the high-profile fight into practical lessons for real families – whether your estate is $275,000 or $275 million.
Key takeaways you can use to prevent “Margaritaville” moments
- Be careful when appointing Co-Trustees. This is now the third time in three months that we have pointed out the importance of carefully selecting (and periodically reviewing) your choice of Successor Trustees upon your disability or death. But the Universe keeps shouting out at us, so we have to heed and repeat its warning! Co-Trustees can provide checks and balances – but they can also deadlock. So don’t name Co-Trustees who you feel won’t cooperate and reach an agreed upon solution when issues arise.
- Have a mechanism for Co-Trustee removal and replacement if it doesn’t work out. In our typical Living Trust, there are several safeguards. First, if the independent Co-Trustee is unable or unwilling to act (or resigns), a next successor Co-Trustee already has been named by you (or the initial Co-Trustee may appoint a successor, independent Co-Trustee). Second, if the initial one won’t resign, they may be removed and replaced by another independent Co-Trustee through the action of a “Trust Protector.” Third, if a vacancy arises in the Co-Trustee position, the trust beneficiary (here Jane) could name another Co-Trustee who is an independent bank or trust company.
These alternative actions often persuade the independent Co-Trustee to cooperate without first going to court – and suffering lengthy delays, unwanted publicity, and additional legal fees and expenses that waste away the estate!
- Prepare Special Planning for any Business. This planning typically does not occur in the trust document itself but rather in the documents establishing the entity that the business is held in (like an LLP, LLC or corporation). Keep in mind that a “business” may include investment assets like rental real estate. The business should have an “Operating” or “Management” Agreement that clearly dictates who has daily management and hiring authority and must consent to certain major decisions (like buying and selling assets, liquidating, and distributing). This is important because you may want the person(s) named in charge of the business to be different than the trustees of your Living Trust. This separate Agreement should be handled by your business attorney and a copy forwarded to your estate planning attorney.
- Make Good Use of our Trustee Manual. Our Living Trust estate plans typically come with a Trustee Manual that contains plain-English explanations of the Trustee’s duties and obligations, plus helpful checklists of key steps and actions. This Manual, along with having your future trustee attend a Successor Trustee seminar can help avoid some of the problems that happened in Margaritaville and elsewhere.
Bottom line
Most families won’t face headlines like Jimmy Buffett – but the same Co-Trustee friction can show up at all wealth levels. Thoughtful, thorough planning can save years of stress (and a lot of legal fees) for your loved ones.
