Lessons in Estate Planning from Rain Man
Rain Man is one of the most iconic American movies of the 1980s. Starring Tom Cruise and
Dustin Hoffman, it won four Academy Awards, two Golden Globe Awards, and was the highest-grossing film of 1988.
Although secondary to the main plot, several estate planning threads run through Rain Man,
including those related to trusts, beneficiaries, and how to plan for children who have very
different personalities and needs.
Two Brothers and an Inheritance
Charlie Babbitt (Cruise), the estranged son of a millionaire, is dismayed to learn that his late
father, Sanford Babbitt, left him only a '49 Buick Roadmaster and some rose bushes. The rest of
his father's $3 million estate was put in a trust for the benefit of a mystery person.
That person turns out to be Raymond Babbitt (Hoffman), Charlie's long-lost, autistic-savant
brother who is institutionalized at a facility for people with developmental disabilities. The trustee
of the trust, Dr. Bruner, is the director of the facility and Raymond's doctor.
Charlie tries to convince Dr. Bruner that he is entitled to half the money in the trust. When that
strategy fails, Charlie takes Raymond out of the facility without permission in an effort to use him
as a bargaining chip.
On a weeklong road trip from Cincinnati to Charlie's home in Los Angeles, Charlie bonds with
his quirky brother and has a change of heart. Upon arriving in Los Angeles, Charlie finds that he
is more interested in caring for Raymond than getting the money and gives up his fight for the
inheritance.
Estate Planning Issues and Lessons
For parents, ensuring that children are provided for in an estate plan is top of mind, but estate
planning is not one-size-fits-all. What makes sense for one child may not be suitable for
another.
This is one lesson we can learn from Sanford Babbitt and the different treatment his sons
receive in his estate plan: you are under no legal obligation to provide equally for your children.
Indeed, equal treatment may not be in their best interests.
When a Child Cannot Handle Their Inheritance
Both Charlie and Raymond get different inheritances, both in what they receive and in whether
they receive it outright or in trust, motivated by different factors.
We learn in the movie that Charlie spent time in jail and he and his father had a falling out.
Reading between the lines, it seems that Sanford viewed Charlie as too immature to handle a
large inheritance. He may have thought, as many parents do in his situation, that a large
inheritance would only further enable Charlie to follow the wrong path.
Raymond's neurodivergent condition requires professional care in an institutional setting. This is
clearly why Sanford placed money for him in a trust and named a doctor as trustee who would
ensure his special needs were met for the rest of his life.
We are not sure what type of trust Sanford created for Raymond or what special instructions (if
any) were imposed on the trustee. In real life, the trust may have been structured as a special
needs trust, which can benefit a disabled individual without jeopardizing their eligibility for
government assistance.
Sharing Information Before Death Can Reduce Conflicts
While Sanford probably could not have predicted that Charlie would find Raymond and hold him
for ransom, he could reasonably have anticipated, based on Charlie's history, that Charlie would
go looking for the money and that trouble would follow. He could have avoided trouble by
sharing his inheritance plans with Charlie before he died. Instead, the news came as a total
shock to Charlie and might have pushed him to act irrationally.
Likewise, Charlie's surprise at learning about a brother he did not know existed set the stage for
dramatics befitting a Hollywood blockbuster. In hindsight, things worked out between the Babbitt
brothers. In reality, most parents would want to avoid such theatrics.
Parents have reasons for keeping personal information from their children. However, secrecy
should be weighed against the explosive power of revelation, especially if the parents will no
longer be around to explain the motivation behind their actions.
Using an Estate Plan to Bring Family Together
Careful estate planning can not only help stave off family conflicts but also strengthen familial
bonds. Whether a child has a disability or a track record of worrisome behavior, or the parents
simply want to instill their values in their children, a trust can have provisions that guide
beneficiaries toward a specific desired outcome or deter bad behaviors.
Instead of cutting Charlie out of the trust, for example, Sanford could have structured the trust to
benefit both of his sons and demanded that Charlie only receive distributions if he helped to
care for Raymond. Becoming active in Raymond's life could have incentivized Charlie to take a
more mature course of action while bringing the brothers together.
Rain Man has a happy ending, with Charlie returning Raymond to Dr. Bruner and promising to
visit him. But happy endings are not nearly as common in life as they are in Hollywood, and this
happy ending was mostly accidental. Imagine the drama that may have been avoided if Sanford
had stated that Charlie could benefit from the trust if he just spent time with his brother, got to
know him, and looked after him.
Write Your Legacy Script with Help from an Estate Planning Attorney
Rain Man won Academy Awards for Best Original Screenplay, Best Actor, and Best Director,
showing the magic that can result when all the elements of a movie come together.
Bringing a successful estate plan to fruition, like making a successful movie, requires a
collective effort. If you are the author of your legacy script and the star of your life's movie, then
think of us as the director, working behind the scenes to interpret the script and maintain the
creative vision throughout the process, from preproduction meetings to the final edit. To create
or update your estate plan, please get in touch with us to schedule a meeting.
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.
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