Most of us don't have a billion dollar estate to manage, nevertheless, losing our ability to manage what we have worked a lifetime acquiring would be devastating. We have enormous empathy therefore for the tribulations faced by media mogul, Sumner Redstone, whose capacity to continue to operation his $3 billion holdings in Viacom Inc. and CBS Corp is being challenged by his ex-girlfriend, Manuela Herzer.
A Los Angeles probate judge asked whether it was wise for the 92-year-old to name Viacom CEO Phillipe Dauman as his agent in charge of his health care decisions rather than a family member. Judge David Cowan, who will decide the case without a jury, said he isn't confident things "are all patched up" between Sumner and his daughter Shari Redstone. Herzer contends that Redstone is incapacitated and manipulated by those around him.
At least one shareholder has sued the boards of Viacom and CBS, accusing them of wasting millions of dollars paying Redstone when he was unfit to take an active role in the businesses. He stepped down as chairman of both companies only last month, days after he was examined by a psychiatrist designated by Herzer as part of her court case.
The control of Redstone's 80% voting stakes in Viacom and CBS will pass to a family trust if he becomes incapacitated or dies. Shari Redstone and Dauman are two of the seven members of that trust. Redstone's Viacom and CBS holdings are exempt from the lawsuit, as the family trust that will take control was established long ago.
Herzer, who describes herself as Redstone's longtime companion and caretaker, alleges he wasn't able to make his own decisions when he removed her from his advance healthcare directive and evicted her from his mansion last fall. Redstone's lawyers claim Herzer's ulterior motive is to contest her removal from his will. She apparently stood to inherit $50 million plus Redstone's $20 million home before she was cut out of his estate plan.
As you read this, please don't dismiss it as just another story about the rich and famous. This did not occur simply because Redstone has amassed a fortune. It's more likely this is a tale of a loved one scorned. Which makes it the type of thing that happens to ordinary people every day. Isn't it time you put an estate plan that works in place? We can help with that; schedule your complimentary consultation today.
Reference: Bloomberg (February 29, 2016) "Redstone Faces Competency Trial Amid Fight Over Media Empire"