How Bad Trustee and Executor Choices in your Will and Trusts Can Destroy Estate Planning

NFL superstar Johnny Unitas passed away in September, 2002, and his estate planing strategy has been a mess.

Unitas’s families from two marriages are at odds. His son and namesake is fighting to get the company father and son ran back from the estate’s executors.

The executors are Unitas’s longtime accountant and attorney. Unitas and John, Jr. had a shareholders’ agreement stating that the executors would give John, Jr. control of the company in return for the proceeds from a life insurance policy. The executors and Unitas’s second wife maintain that John, Jr. took improper payments from the company and changed the beneficiary of the insurance policy. So, they refused to abide by the shareholders’ agreement, fired John, Jr. and kept the company.

John, Jr. alleges the executors were responsible for his father’s 1991 bankruptcy and that John, Sr. never wanted them involved with the company formed in 1991, despite their repeated efforts to get control.

A Maryland court will decide who gets the business.

I’ve long maintained that people need to choose their executors and trustees more carefully than they do. One has to wonder why Unitas named as executors people he did not allow near his business, as his son claims. One also has to wonder why his son could be trusted to run the family business but not to administer the estate. It appears that Unitas routinely named his attorney and accountant as executors, as many people do. The family would be better off with a neutral executor.

Unitas, through the shareholders’ agreement and life insurance, apparently tried to create a smooth transition of the company’s ownership. Unfortunately, his estate planing strateagy did not anticipate how the transition could be disrupted. We all need to anticipate potential conflicts and conflicts of interest when designating executors and trustees. Taking the easy way out on these issues only makes things harder on the survivors.