Wealth, Legacy, and Family Drama: Inside The Descendants
Picture this: You are standing on a piece of land that has been in your family for generations
and has been handed down through a trust. The land is imbued with memories from your
childhood, your children, and family gatherings. You want to keep the land in the family for years
to come. However, the family trust is set to end soon, and when it does, you and your cousins
will each own a share of the property.
At that point, the land will likely be subdivided, sold off, and developed. You look at old photos of
your family on the land and convince yourself that is not what they would have wanted, and it is
not what you want either. Other family members want to sell, however, and cash in.
What can you do, legally, to protect the land while keeping your family members at bay?
The Descendants Movie Showcases Trustee Challenges
The above scenario is the plot of the 2011 movie The Descendants, starring George Clooney
and based on a novel of the same name.
Although fictional, The Descendants has some basis in fact and reflects a common estate
planning challenge that many families face when attempting to hold and manage assets
(accounts and property) for multiple generations.
Clooney plays Matt King, a Hawaii attorney and sole trustee of a family trust established by his
great-great-grandparents, a Hawaiian princess and an American banker. The trust's most
valuable asset is a 25,000-acre parcel of pristine coastland on the island of Kauai. The land has
been in the family since the 1860s, but the trust is set to end in seven years.
Matt, one of about 20 beneficiaries of the trust, is not reliant on it for income and does not want
to sell the land. However, many of his cousins have squandered their inheritance and need the
money.
Worried that distributing the land to his cousins would be a "trainwreck" - alluding to the
likelihood that the co-owning cousins would end up in a complicated and costly partition
lawsuit - Matt must decide what to do with the land.
Right before he is about to sell to a developer, Matt has a change of heart. He decides against
selling the family's "piece of paradise," which his ancestors would not have wanted developed;
he then has seven years to find a way to preserve it and the legacy imbued in it.
Matt's decision sets the stage for litigation between him and his cousins, who prefer to sell.
Some Lessons about Trusts from The Descendants
The author of The Descendants reportedly drew inspiration from family trusts that were in the
news around the time she was writing the novel.1 To this day, large pieces of land are still held
in Hawaii by so-called Ali'i trusts that were set up more than a century ago to hold the assets of
Hawaiian royalty.
The Descendants offers estate planning lessons about issues like a trustee's power to act
unilaterally, the duties that trustees owe to trust beneficiaries, problems associated with coownership of valuable undeveloped land, and more.
- Whenever property must be distributed among multiple family members, like the land
held in Matt King's family trust, the potential for family conflict exists. The "trainwreck"
that Matt King envisions centers on the likelihood of his cousins fighting over how to
divide their interests in the land when they become co-owners. This situation can put
tremendous pressure on a family trustee, especially one who is also a beneficiary, to
remain objective in the face of family demands.
- While it is not specified in the movie how Matt became sole successor trustee,
multigenerational trusts need a mechanism for selecting successor trustees who can
take over for the initial trustees and those successors who follow them.
- Matt, as the sole trustee, has a legal duty to carry out the trust's purpose in a way that
serves the beneficiaries' best interests. When he asks his cousins what they view as
being in their best interests, almost all of them want to sell. However, just because a
beneficiary says they want something or consents to a trustee's proposed action does
not mean they cannot later sue the trustee for a perceived breach of duty if their decision
was bad in hindsight.
- A third-party professional trustee or co-trustee may be better suited than a family
member to navigate the types of real-life family inheritance issues depicted in The
Descendants. A corporate trustee from a bank or trust company can also provide
continuity over multiple generations.
- The person who sets up a trust and transfers their accounts and property to it should be
clear about their intentions so that future heirs do not have to wrestle with the type of
decision that Matt agonized over.
Write a Legacy Script for Your Descendants
You do not have to be the descendant of Hawaiian royalty to struggle with the sorts of estate
planning quandaries that Matt King faces in The Descendants, and it does not have to be a
piece of land you are trying to protect. It could be any assets that are placed in a trust and
accumulate wealth for successive generations.
The longer the duration being planned for, the greater the potential challenges. Let us help you
write a legacy script that honors your family's past and secures the financial well-being of your
future beneficiaries.
1Julia Flynn Siler, 'The Descendants' Aims to Lay Down the Law in Hawaii, The Wall Street J. (Nov. 26, 2011),
https://www.wsj.com/articles/BL-SEB-68005.
MEREDITH | PC
4325 Windsor Centre Trail
Suite 400
Flower Mound Texas 75028
214-513-1013
This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional Counselors to evaluate or pursue tax, accounting, financial, or legal planning strategies.
You have received this newsletter because I believe you will find its content valuable. Please feel free to Contact Me if you have any questions about this or any matters relating to estate planning.
