Over the past year, the saga of billionaire Sumner Redstone’s estate and capacity fight has continued to play out in the United States. Redstone, an American media magnate, was the subject of a lawsuit brought by Manuela Herzer, a former girlfriend. Herzer alleged that the CBS Corporation and Viacom owner was incapable, and was being manipulated by his daughter, Shari Redstone. That lawsuit was dismissed in May of this year.
The next chapter in the story is the upcoming trial in a lawsuit brought by Viacom President and CEO Philippe Dauman, who is also Redstone’s handpicked heir apparent, against daughter Shari. Dauman is fighting against his removal, as well as his co-plaintiff George Abrams’s removal, as trustees of the Sumner M. Redstone National Amusements Trust, a trust that controls Redstone’s media empire, as well as corporate directors of National Amusements, a company that holds most of Redstone’s assets. Dauman alleges that Shari manipulated her father into removing him. A trial date of September 19, 2016 has been set. Redstone himself is set to be deposed in the lawsuit.
If the case stands for anything, it is that even the most careful estate planning cannot prevent capacity litigation. Unlike the singer Prince, who died without a will, Redstone had a series of trusts set up that governed the disposition of his assets. As the New York Times pointed out, Redstone, who has a fortune estimated at over $5 billion U.S., “could afford the best estate planning that money could buy.”
Nevertheless, a succession plan is essential to anyone who wants their wishes carried out in the event of incapacity, or death. A probate judge in Minnesota appointed Prince’s personal bank, Bremer Bank, to act as the estate administrator until a “general Personal Representative is appointed by the Registrar or by the Court.” The estimated $250 million U.S. estate will be distributed according to the applicable succession laws amongst his sister and five half-siblings. One U.S. tax lawyer suggested up to half of the estate may be caught in taxes because of the lack of succession planning. While the litigation surrounding Redstone is still ongoing, it is probably safe to say that Redstone’s wishes are more likely to be carried out thanks to his succession planning.