“An irrevocable trust is a trust generally created during someone’s lifetime that is exactly what it says — it can’t be revoked.”
Tom Benson and his grandchildren are in a fight over the ownership of the New Orleans Saints NFL football team and the New Orleans Pelicans NBA basketball team after his death.
The family has filed a petition to have the teams’ owner declared incompetent and overturn his current plan to leave his sports empire to Gayle Benson, his wife of 10 years.
Benson is believed to control the largest fortune in the state of Louisiana. In 2009, he signed a succession plan that would leave the fortune in the hands of his daughter and grandchildren after 87-year-old Benson passes away. However, Benson has since become estranged from those relatives and recently announced he was changing his succession plan to leave everything to his wife.
WDSU has more details on this story in “Fight over Louisiana’s largest fortune continues.”
This case will turn on the exact wording of the original trust documents.
If the daughter and grandchildren are already vested beneficiaries of an irrevocable trust, then it will be extremely difficult to change the trust to exclude them. This is one of the reasons that many people prefer revocable trusts. However, there are tax trade-offs to be made with the different trusts.
Clearly these are complex matters and weighing the tax advantages against the benefit of flexibility (or lack thereof) requires close examination, a sharp pencil and good judgment. Irrevocable planning should only be undertaken with careful reflection and the advice of experts.
Reference: WDSU News (January 23, 2015) “Fight over Louisiana’s largest fortune continues”