September 20, 2024
70 albums, more than 50 million records sold worldwide, 20 Grammy Awards, two Primetime Emmy Awards—singer Tony Bennett enjoyed a remarkable career. He started as a singing waiter, before being drafted for the final stages of World War II in 1944. After the war and a stint at the American Theater Wing on the GI Bill, Bennett began his climb to fame. Mitch Miller signed him to a recording deal with Columbia Records in 1950, and a series of hits followed through the 1950s and 1960s.
Bennett’s popularity dimmed in the 1970s, but in 1980 his son Danny took over the management of Bennett’s career. He was introduced to a new generation, with appearances on MTV and many other television shows. Bennett continued performing well into his 90s, and his longevity put him into the Guinness Book of World Records. Rolling Stone reported that Bennett’s earnings in the last 15 years of his life reached $100 million, and his fortune at his death in 2023 was estimated to be $200 million.
Trouble in paradise
A living trust was the foundation of Tony Bennett’s estate plan. He and son Danny were the trustees, with Danny becoming sole trustee at his father’s death.
The terms of the trust and the full scope of Bennett’s estate are not yet public. What we do know is that Danny’s two sisters have filed a lawsuit in New York over his actions as trustee. Among their claims:
• Danny supervised the sale of Bennett’s music catalogue and image rights in 2022, but failed to provide a full accounting of the sale.
• Bennett’s clothing was donated to charity without notifying the sisters first, as required by Bennett’s will.
• Danny prevented the sisters from visiting Bennett’s apartment to view his tangible personal property, some of which had great sentimental value.
• Tangible personal property was auctioned off without consulting the sisters, even though such a sale was not required by the estate planning documents.
• Danny received an “improper loan” of $1.2 million, and he received gifts totaling $4.2 million, which was double what Bennett’s other children received.
The soundness of these claims and the outcome of the lawsuit are unknown at this time, but future family harmony among Bennett’s four children looks unlikely.
Communication is critical
As a general rule, naming a family member who is also a beneficiary to be a trustee or the executor of an estate invites misunderstandings and disagreement among the heirs. The ones not chosen may feel slighted or disrespected. They may not trust the judgment of the family member trustee, they may be quick to see bias or self dealing. They may not appreciate how complex is the job of trusteeship.
That’s not to say that choosing Danny to be the trustee of the Bennett Family Trust was a bad idea. From the decades of managing his father’s career, Danny had an intimate knowledge of the family finances. He was well positioned to understand how to maximize the value of the Bennett estate assets.
However, trustees do have a fiduciary obligation to report promptly and fully to trust beneficiaries, as well as a duty to keep thorough records of all decisions and transactions. Danny might have profited by working with a trust department or trust company as co-trustee, so as to dot all the i’s and cross all the t’s of trusteeship.
In any event, estate plans should be discussed and explained to the beneficiaries in advance, to align their expectations with their future realities. The intentions for the family wealth, the reasoning behind bequests, and the choice of the stewards for that wealth should be reviewed. An airing of the motivations behind an estate plan will usually promote family harmony. But at the same time, heirs need to understand that estate planning isn’t a family-wide project, and the plan itself isn’t being put to a vote.