Doris Duke was a tobacco heiress known as "the richest girl in the world" after she inherited the estate of James "Buck" Duke, founder of the American Tobacco Co. She reportedly had affairs with General George S. Patton, surfing guru Duke Kahanamoku, and actor Errol Flynn. She was Jackie Kennedy's friend and was pals with Imelda Marcos (even posting $5 million in bail when Marcos was arrested for racketeering). Doris Duke was a true eccentric - a journalist, jazz pianist, competitive surfer, art collector, and philanthropist. No real thread ties all those hobbies together except for money, and Duke had a lot of it. When she died in 1993 at age 80, her fortune was estimated at $1.3 billion.
Duke was married twice, but no child survived adulthood. Despite accumulating many friends and lovers throughout her lifetime, she lived the life of a recluse at the time of death. In her will, she named Bernard Lafferty as executor of the estate. That’s where the problems started because Lafferty didn’t have the skills, education, or temperament to serve as executor of the will.
What’s the Purpose of an Executor?
An executor is a person who is legally responsible for managing the finances of a person who has died. This generally means that the executor has to pay the person’s debts and taxes and then distribute the remaining property to the person’s chosen heirs. This is an important decision no matter how big or small the estate. An executor must be trustworthy enough to follow your instructions while handling your debts appropriately. Most people pick a family member or a trusted family friend to serve as executor. But what happens when you don’t know anyone willing or able to serve as executor? Or if the people who could serve as your executor just don’t seem capable of handling the job?
In this article, we will discuss what to do if you find yourself in this situation, with a little help from Doris Duke.
The Butler Didn’t Do It
Duke’s executor was her butler. Despite her eccentricity, nobody saw this big mistake coming. Duke had been judicious in controlling her money during her lifetime, supporting AIDS research and establishing parks, and funding charitable causes. However, Lafferty seemed to take control of her life the year before she died. The prior will had been drafted by her lawyers and named her personal physician as executor. When she passed away, Lafferty turned up with a new will that was filed for probate in New York. The physician knew something was up because he had been excluded from her life and wasn’t present when she died. As executor, Lafferty was sitting on top of an empire worth more than a billion dollars.
Duke wanted her money to go to the Doris Duke Charitable Foundation, which would fund charitable causes. However, the executor gig came with big perks - a $5 million fee and the potential for bonuses for overseeing the other charities. Lafferty also got $500,000 a year for life. At just age 49, Lafferty had basically won the lottery. He wasted no time in spending lots of money, including hiring 15 lawyers to fend off a will contest brought by the physician.
The probate judge - the niece of Otto Preminger - eventually removed Lafferty as executor. Why? Because he was wasting her assets, abusing drugs and alcohol, wrecking her cars and then replacing them with new models (including a chauffeur), and using estate funds for his personal gain. Judge Preminger also found that Lafferty was "basically illiterate" and unable to manage her affairs.
New York’s high court reversed Judge Preminger’s order, but it was still clear that Lafferty wasn’t qualified. A settlement was reached that established a board of directors to steer the Doris Duke Charitable Foundation.
Hire a Professional Executor
It’s understandable that Duke, just like most people, preferred to give the executor position to someone she knew and trusted. However, there are considerable drawbacks to naming someone who doesn’t have the capability of managing an estate. If you don’t seem to know anyone willing or able to serve as your executor, you should consider a professional executor. Professional executors are individuals or companies that specialize in managing estates. They have the knowledge and experience to handle estate administration's complex legal and financial aspects.
Often, professional executors are accountants or lawyers or people and companies with experience handling trusts. This type of expertise is invaluable since knowledge of tax law and estate planning comes in handy when an executor settles debts and makes smart financial decisions. The cost of a professional executor varies.
Name an Alternate Executor
One of the most common mistakes couples make is naming their spouse as executor of their estate without preparing a backup plan just in case their surviving spouse doesn’t live long or isn’t able to serve. That’s why you must always name an alternate executor in case your first choice is unable or unwilling to serve. This can be a family member, friend, or professional executor. Naming an alternate executor ensures that your estate will be managed by someone you trust if your first choice is unable or unwilling to serve.
Consider a Corporate Executor
A corporate executor is not quite the same thing as a professional executor. A corporate executor is basically either a bank or a trust company. A corporate executor puts an entire team at your disposal, but this is usually only a good option for larger estates or complex estates with multiple beneficiaries. These corporate entities have the experience and resources to handle complex legal and financial issues. If you use a corporate executor, they may charge a higher fee than a professional executor. However, if you have a large or complicated estate like Doris Duke, then a team approach would be the best option.
Pick a Lawyer
If you have an estate planning attorney, they may be able to help you find a professional executor. Even if your lawyer isn’t an expert in estate planning, attorneys often work with professional executors and can provide referrals or recommendations.
Conclusion
Choosing an executor for your will requires careful consideration. If you do not have anyone willing or able to serve as your executor, you have options. If your estate is large, then make sure you research professional executors and corporate options. You can ask your attorney for help or hire a lawyer to help you sort it out.
