Monday, May 13, 2019
Tom Petty’s unexpected death on October 2, 2017 dismayed his fans worldwide. Whenever a celebrity passes away, especially when it is sudden, the news sadly can be followed up with the story of how they failed to plan for their death, such as was the case with Prince and Aretha Franklin. But Tom Petty had a complete estate plan laid out, including a 77-page revocable trust document that he diligently amended throughout his life.
In the trust agreement, Tom named his second wife, Dana York Petty, to serve as the successor trustee after his death. One of her responsibilities was to create an LLC to hold Petty's music catalog. Though Dana is to have broad discretion such as how the limited liability company makes decisions, Petty's two daughters from his previous marriage are entitled to “participate equally” in the management of the limited liability company. The wording has unfortunately created tensions between the daughters and their stepmother.
The daughters have taken the position that, as the holders of the majority vote of the company, they have the power to control the company, including Petty’s artistic property. Dana, on the other hand, has taken the position that Petty intended for the parties to unanimously consent to actions taken by the company. Litigation has ensued between the parties.
Though Tom Petty appeared to put together a well executed estate plan and trust document, a prudent estate planning attorney may have advised him to appoint an independent trustee to serve as the successor trustee following his death and to require a professional manager to operate the limited liability company. The objectiveness of the independent trustee can foster confidence and cooperation between the trustee and the beneficiaries.
See Mary Rennie Rowe “M.R.” Litman, Even the Best Laid Plans Can Go Awry: The “Breakdown” of Tom Petty’s Estate Plan, WilliamsMullen.com, May 7, 2019.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.