Lakers Drama Underscores the Need to Plan Ahead
Dr. Jerry Buss took the time to ensure his legacy was protected many years ago, and we are just now witnessing the very real benefits it has provided his family. Proper planning has allowed the Buss family to remain in control of the Lakers organization.
Key Takeaways
A comprehensive estate plan ensures that your wishes are carried out exactly as you desire and not left up to the interpretation of beneficiaries or the court.
Everyone reacts to grief differently and it is difficult to anticipate how individuals will react in a given situation, but proper advance planning will provide you with peace of mind knowing that your assets will be protected and distributed as you wish.
Proper planning eliminates the potential for sibling infighting down the road.
Over the last month, there has been an interesting convergence of two of my passions, estate planning and the Los Angeles Lakers. This saga has demonstrated the importance of creating a comprehensive estate plan to ensure your wishes are carried out exactly how you want. The owners of the Lakers, the Buss family, have been embroiled in a power struggle since Dr. Jerry Buss’ death in 2013.
Before his death, Dr. Buss created a very complex estate plan including several different trusts to ensure that his assets and especially his beloved Lakers would be distributed according to his wishes and that his children’s interests would be protected. Dr. Buss had six children, but two have become the face of the power struggle: Jim and Jeanie. Upon his death, Dr. Buss left Jim in charge of basketball operations and Jeanie in charge of running the business side of the Lakers. Jeanie was named the controlling owner and has been the Lakers representative for the NBA board of governors. Over the last several years, many in the media wondered if Jeanie’s position as controlling owner gave her the power to remove Jim from his position if she felt he wasn’t doing well enough.
Well, that is exactly what happened in early February, after several terrible seasons and questionable personnel moves; Jeanie fired Jim and replaced him with Magic Johnson. But then things got really interesting: Jim decided not to take his firing lying down and attempted to schedule a board meeting with the intent to select new members of the board. The controlling owner of the team must be a board member, so if Jeanie was removed as a board member, she would no longer be able to be the controlling owner. Unfortunately for Jim, because Jeanie is a board member she had to be notified of this meeting and upon receiving notification she filed a lawsuit against Jim and he decided to cancel the meeting.
“...we need to have a clear plan for how we want our assets to be distributed and we can’t just assume everything will take care of itself after death.”
In another strange turn of events, rumors began circulating that Jim and one of his brothers, Johnny, were going to attempt to break Dr. Buss’ carefully planned trusts so they could cash out on their interest in the team. This would have had very serious consequences for the Buss family as they own 66% of the team through the four trusts established by Dr. Buss. If Jim and Johnny were able to successfully sell their shares, the Buss family would no longer be the majority owners of the franchise because there ownership would have dropped to 44%.
However, the visionary Dr. Buss strategized carefully with his estate planning attorneys to create air-tight trusts that would ensure his legacy, as well as his family’s legacy, would be protected. Relying on those carefully crafted estate planning documents, Jeanie was able to petition the court to have Jim removed from his position as one of the three co-trustees. In addition, the court stated that the remaining trustees are to do everything in their power to ensure Jeanie remains controlling owner and the head of the board of directors for the duration of her life. Without the comprehensive estate planning documents created by Dr. Buss and his attorneys, his legacy and all he did to build the Lakers into one of the most valuable sports franchises in the world could have been ruined by a simple power struggle between two of his children.
Now, I’m sure you’re thinking: “what does two millionaires arguing over the future of a billion-dollar sports franchise have to do with my estate planning needs?” Actually, this scenario is quite common among family members from all walks life. The Lakers' bizarre situation makes one thing clear to all of us: we need to have a clear plan for how we want our assets to be distributed and we can’t just assume everything will take care of itself after death.
Everyone wants to believe that their children get along fine and that issues like this won’t happen to them. While that very well may be the case in most instances, grief affects everyone in different ways and no one truly knows how they will react in a given situation until they are in that situation. By creating a comprehensive estate plan, your wishes are laid out clearly. This not only gives you peace of mind knowing that your loved ones will be taken care of, but also takes the pressure off your children because they know you spent time planning and making decisions so they would not have to make them. And in the event one of your children tries to go rogue and pull a Jim Buss, there are provisions we can insert into your documents to protect your legacy and ensure your wishes are followed.
Take action now and schedule a strategy session, and together we can minimize stress and maximize peace of mind.
Joshua Rogers is a co-founding principal of Schlau|Rogers and an estate and business planning lawyer practicing in Orange, San Diego, Los Angeles and Riverside counties. He is an avid Lakers fan, blogger, aspiring scuba diver, and takes pride in helping others reach their goals.
At Schlau|Rogers, we do more than just estate and business planning, probate and trust administration. Our objective is to provide individually-tailored plans that allow you the opportunity to reach your goals, all while minimizing headaches and risk, and maximizing peace of mind.
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