Donald Sterling, The Los Angeles Clippers and a Trust

Donald Sterling is the “owner” of the Los Angeles Clippers basketball team.  During this year’s playoff run, news broke of Mr. Sterling’s racist statements.  This became the bigger headline than the actual basketball, and the talk was on how the team can be taken from him.

There are countless legal issues surrounding the entire case and process, but the interesting thing happened in probate court this week.

It turns out that Donald Sterling does not own the Clippers.  In fact, the Sterling Family Trust owns the team.  Mr. Sterling and his wife, Shelly Sterling, are the trustees of the trust.  As trustees, they control the team and make the decisions. But the legal owner is the trust, not the individuals.

And since the trust is a private document, that spells out the rules and provisions and processes of how things are to be handled, a court should only be involved if the provisions of the trust are not clear (aka ambiguous).

The Sterling Family Trust provides that a trustee can be removed if two doctors certify that a trustee is incompetent to handle financial affairs.  There are three doctors who have made the certification that Donald Sterling cannot handle complex affairs due to the onset of dementia.  Under the terms of the trust, then Ms. Sterling is the sole trustee and can make the decision to sell the team (Ms. Sterling has lined up a sale for $2 billion to Steve Ballmer, former Microsoft executive).

Donald Sterling wants the sale stopped, and initiated this suit.  The judge, Jude Michael Levanas, indicated in a pre-trial hearing that he does not know why the issue is in court, saying that the trust is “so unambiguous that ‘I could decide this case in five minutes.”  (as reported on http://www.nba.com/2014/news/06/23/clippers-sterling.ap/).

The issues that face the Sterlings are a reality for many of us.  Having a properly drafted trust ensures that the family’s affairs stay within the family.  And you don’t need to be a sports team owner to enjoy these protections.

Come in to talk with one of our attorneys to discuss your estate planning options, and how a trust can help you from having to go to court.

Call us today from your free consultation.

Contributed by MH Albuquerque, Santa Fe and Las Cruces Estate Planning Attorney, James P. Plitz.

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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.