If you’ve ever watched a movie about a will or looked at one yourself, you might have noticed the following language: Testator is of sound mind and memory.
What does this mean? This language refers to the requirements of establishing a legally valid will and/or trust. A person must be of “sound mind” to make a will. The phrase “sound mind” means the person has the mental capacity to execute a will and is free of undue influence, fraud, and coercion.
When an elderly person with significant wealth makes a big change to their will, this often sets off red flags to the person’s family. Consider the years-long saga of Tom Benson, former owner of the New Orleans Saints.
Tom Benson was a self-made man. He started out as a used car salesman and ended his life as the owner of an NFL football team, the New Orleans Saints, and a professional basketball team, the New Orleans Pelicans. On top of his sports business, Benson invested in banks, car dealerships, and real estate. By the time Benson was in his late 80’s his estate was valued at $2 billion dollars. Benson was widowed twice and he had a clear succession plan: he would leave his estate to his only living child, Renee, and her two children, Rita and Ryan LeBlanc. All three of the heirs worked in the family business. However, everything changed when Tom Benson married Gayle LaJaunie Bird in 2004.
Gayle was 20 years younger than Tom and they got married just 11 months after the death of his second wife. This raised alarm bells for some of Benson’s family members. During his marriage to Gayle, Tom became heavily involved in philanthropy. Then in 2014, after he had been married to Gayle for 10 years, Tom publicly announced that he had changed his will to make Gayle the sole beneficiary of his estate. He wanted her to inherit everything, including sole ownership of the two sports teams. Tom released an incendiary letter announcing his intentions and disparaging his daughter. This action enraged Renee and her adult children. They filed a civil lawsuit alleging that Tom was not of sound mind when he changed his estate plan.
The lawsuit alleged that Tom was incompetent and was in mental decline, which made it easy for Gayle to unduly influence his decisions. The family said that New Orleans Saints executives were conspiring with Gayle to wrest control of the team from the Benson family. The executives fired Renee, Ryan, and Rita and removed their access to both teams’ headquarters. Gayle sought legal guardianship over Tom’s affairs. Her father fired back, alleging that Gayle and his grandchildren were not competent to run a billion-dollar business.
What is a Guardianship or Conservatorship?
When a family member believes a loved one can no longer make their own decisions, they may apply to the court for a guardianship or conservatorship. A legal guardian will take care of a person’s day-to-day personal care and medical decisions. A conservatorship grants someone more restrained decision-making powers, typically limited to paying bills and handling finances.
Generally, to prove that a guardianship or conservatorship is necessary, the family must prove that the person is in mental decline - essentially, not of sound mind. Courts grant guardianships and conservatorships when someone is suffering from dementia, Alzheimer’s disease, brain injuries, or other special needs. Although this sounds like something that should be a high bar, at times these processes are subject to abuse, such as the guardianship that Jamie Spears established over his daughter Brittany’s affairs, which is widely considered to have been a total abuse of power.
Proving Competency
Most states define mental capacity something like this: Mental capacity means a person is capable of (1) knowing and understanding the nature of the act he or she is doing; (2) knowing the extent of their assets; (3) knowing the person’s heirs; and(4) knowing the nature and effect of the proposed will or trust on those heirs.
In late 2015, there was a trial over the competency allegations. During the eight-day trial, Benson's nurse testified that he “agonized over distancing himself from his family members, cried about it, read the December 27, 2014 letter three times, and then decided to place his signature on it.” Two of the three psychiatrists said Tom still had his wits and was able to make his own decisions. The judge interviewed Tom and concluded that although he may have been in a mental fog when he wrote the letter, that it was due to recent surgery and heavy medications. By the time of trial, Tom had recovered and convinced the judge that he knew exactly what he was doing. The judge found that Tom was of sound mind when he rewrote his estate plan. The family appealed the decision and launched another lawsuit, this time in Texas over the terms of a Tom’s living trust.
The Irrevocable Trust
Tom Benson’s property had already been put into an irrevocable family trust, including stock in the Pelicans and Saints, which were in the name of his daughter and grandchildren. The trust terms said that if Benson removed the shares from the trust, he would need to replace them with assets of equivalent value. Tom’s lawyers argued that he complied with the trust terms by canceling debt and adding $500 million in promissory notes that would be due 25 years in the future. But that meant that the three heirs would only get cash in the far-off future and they would be unable to profit from the teams or the other businesses. Trust officials said this didn’t comply with the trust terms.
Finally, after a two-year battle, the parties settled the trust lawsuit, giving ownership of the teams to Gayle and putting Renee in charge of a $1 billion Shirley Benson Trust, named after her late mother. The Shirley Benson Trust assets included Lone Star Bank, five auto dealerships, and real estate in Nevada and Texas. Tom Benson died in 2018 at age 90. Gayle is still the sole owner of the New Orleans Saints.
Lessons from the Tom Benson Lawsuits
What can you learn from the Benson situation? Filing for a guardianship or conservatorship is a serious decision. There’s not always a clear point in time when an aging relative’s mental capacity is suspect, and it can even change from day to day. Before launching a legal process, you need to consider how the family member may react and the possibility that you may be disinherited. You should also be very aware of the terms and conditions in a living trust. Benson’s living trust was irrevocable, which means that once he established trust assets, he could not continue to control those assets. This hampered Benson’s ability to change his mind about giving his estate to his heirs. If you are considering an irrevocable trust, be aware that it is truly unchangeable.
