On February 14, 2013
Doris Duke was a wealthy philanthropist who died leaving a fortune worth around $1 billion. Her heirs are teenage twins, a 15-year-old boy and girl, each of which stands to inherit $500 million. The money was left in a trust, however, and the trustees are evidently so hesitant to administer funds from the account that both twins were suspended from their private school for failing to pay tuition and fees of $24,524.
The twins will only gain access to their full inheritance when they turn 21. Their tuition payment was over a month late at the time of their suspension. Fortunately for the 15-year-olds, the tuition bill was eventually paid and they were subsequently reinstated in their educational program in nearby Utah.
The trustees’ reluctance to dole out money shouldn’t be mistaken for stinginess. It appears to stem from an ongoing battle between the twins’ mother and the trust administrators at JP Morgan. The mother asked for $50,000 from the trust to pay for Christmas gifts for the twins in December and previously asked for $5,000 to throw them a Halloween party. While the trustees approved the party, they cut down the Christmas present request to $5,000, only 10 percent of the original request.
The Duke heirs’ scenario illustrates how important it is to exercise discretion both when choosing a trustee and when acting as a trustee of someone else’s estate. Trusts are designed to provide for heirs, but they of course shouldn’t be squandered. That’s what a good trust protects against. Failing to timely pay routine bills of a beneficiary, however, may be carrying prudence a step too far.
Source: New York Post, “Teenage heirs to Doris Duke fortune can’t pay tuition as they wait for millions,” Julia Marsh and Leonard Greene, Feb. 7, 2013
Categories: Trustees, Executors & Fiduciaries