A trial will be held next month to determine whether Donald Sterling, owner of the Los Angeles Clippers, was properly removed as co-trustee of the family trust that owns the NBA franchise. Sterling was forced to sell the Clippers after he made racist comments that were recorded and distributed to media outlets. Sterling has since threatened to sue the NBA over the forced sale, and has waffled back and forth on whether to proceed with selling the team for $2 billion dollars to former Microsoft CEO Steve Ballmer.
In May, Sterling was found to be mentally incapacitated, which allowed his wife, Shelly, to become sole trustee of the family trust. As sole trustee, Shelly has the authority to negotiate a sale of the Clippers without her husband’s consent. Shelly requested the impending trial to prove Sterling’s mental incapacity so that she can proceed with the sale.
The issue at trial will be Donald Sterling’s competency. If found competent, he will have the authority to act as co-trustee of the family trust and determine whether to keep the franchise or proceed with the sale to Ballmer. There are reports that the trust’s terms provide that Sterling can be ruled mentally incapacitated after being evaluated by two doctors. This is significant to the trial because, according to additional reports, three independent doctors evaluated Sterling in May, each concluding that he is incapacitated and incapable of managing his financial affairs as trustee.
You might wonder why this case involves probate court. Most people associate probate with death. Probate establishes the validity of a decedent’s will, or, if the decedent dies without a will, probate determines the decedent’s heirs. Probate courts also handle incapacity issues. A living probate is a legal proceeding that is designed to protect a mentally incapacitated person who is unable to manage his or her financial affairs. The probate court has a duty to appoint someone to manage and assume the incapacitated person’s financial matters.
In this case, Shelly Sterling’s objective is to have a judge confirm the mental capacity provisions of the family trust. If the judge confirms that Donald Sterling is mentally incapacitated, then Shelly Sterling, acting as sole trustee, can move forward with the sale to Ballmer.
The probate court will hold a four-day trial beginning July 7.
Contributed by MH Phoenix Estate Planning Attorney Darren Richardson.
Morris Hall Can Protect You in Today’s Litigious Society:
We live in a litigious society, where over 1 million lawsuits are filed every year in America alone. Financial predators are looking for ways to take funds from others and often use litigation as their means to do so. At Morris Hall we provide your assets and your loved ones with important protections that can prevent financial predators from taking advantage of you. We do this through proper and current estate planning techniques. With an MH living trust, we can also protect your property, assets and loved ones from probate, estate taxes, gift taxes, creditors, Medicaid spend-down, conservatorship or guardianship proceedings, ex-spouses and more. A living trust also keeps your asset and beneficiary information private and secure to avoid giving financial predators information to use against you and your family. Without a living trust, this information will be made public. For those living in Arizona, we serve the areas of Phoenix, Mesa, Gilbert, Fountain Hills, Scottsdale, Cave Creek, Prescott, Flagstaff, Sedona, Tucson, Sonoita, Arrowhead, Avondale, Goodyear and Tempe. In we serve the areas of , , Rio Rancho, White Rock, Alamogordo, Truth or Consequences and more. Contact us today at 888.222.1328 to schedule an appointment with an attorney in your area!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.