Where did Jimmy Buffett’s Estate Plan Go Wrong — and What Can You Learn from Him?
American singer-songwriter, author, entrepreneur, beloved “Parrothead” leader Jimmy Buffett passed away on September 1, 2023, at the age of 76 at his home in New York. At the time of his death, Buffett had amassed an estimated $275 million estate. He is survived by his wife of 46 years, their two daughters, and their son.
Buffett was diagnosed with a rare and aggressive form of skin cancer in 2019. Reports indicate that he signed his first will more than 30 years ago, with two subsequent amendments to his estate plan.
While estate plans are normally private, litigation has commenced regarding Buffett’s massive estate. His co-trustees – his wife, Jane, and long-time accountant/financial advisor, Richard Mozenter – are now suing each other. Earlier this year, Mrs. Buffett filed a suit in Los Angeles, CA alleging Mr. Mozenter is (1) uncooperative & condescending, (2) has mismanaged the trust’s assets; and (3) charging excessive fees. In response, Mr. Mozenter sued Jane in West Palm Beach accusing her of (1) breach of fiduciary duties, (2) being entirely uncooperative, and (3) interfering in business decisions.
When I first read this story, I thought to myself, how in the world could this happen? Jimmy Buffett was a brilliant businessman with an excellent team of professional advisors, and his estate planning began over 30 years ago. So how could his widow and his longtime advisor – co-trustees of his estate – be in this situation?
Unfortunately, this situation is not uncommon. Mozenter alleges that Jimmy believed his late wife was ill-equipped to run his corporate empire. As a result, he was extremely careful in drafting his estate plan to ensure she had a seat at the table in making business decisions but not full control. Naturally, this decision caused tension. For nearly half a century of making financial decisions with her husband, she must now make those decisions with Jimmy’s accountant.
What lessons can we learn from Jimmy Buffett’s estate planning missteps?
At Ullmann Wealth Partners, Glenn Ullmann, Founding Partner, frequently references the importance of conducting a “lifeboat drill.” A lifeboat drill is a safety exercise conducted on ships to prepare passengers and crew for emergency situations. It seems likely that the Buffetts did not conduct a lifeboat drill regarding Jimmy’s estate plan. Maybe the idea of co-trustees sounded great in theory, but would this co-trustee situation work in practice? Did Jimmy meet with his wife and Mr. Mozenter to discuss his intentions and ascertain whether they could work together to manage his business empire after his death? Did Mrs. Buffett fully understand the role of a trustee? Could a professional trustee have helped instead of one of Jimmy’s personal friends? What would have made Jimmy comfortable with his wife being the sole decision maker of his business empire and avoid the need for co-trustees?
To help avoid estate planning pitfalls, we recommend the following:
- Touch base with your estate planning attorney every three to five years. Laws change, life changes, and so do your goals. New strategies may be appropriate for updated plans.
- Conduct a “lifeboat drill.” Assume the spouse that oversees your financial affairs has passed away and attempt to implement your estate plan. What works? What didn’t work? What questions remain? What if co-trustees have an irretrievable breakdown in their relationship? How is conflict resolved without litigation?
- Discuss the estate plan as a family. Everyone should know the intentions of the estate plan, roles, and responsibilities. Like sitting in an exit row on an aircraft, if someone is unwilling or unable to perform the duties of a trustee, then it is important to find someone who can assume the trustee’s duties.
- Clearly define trustee fees and costs to avoid a dispute over those fees. Transparent expectations can help prevent future disputes.
- Consider a professional trustee. A neutral party may be better equipped to manage complex estates than a family friend or relative.
"Jamaica Mistaica" is the second track on Jimmy Buffett’s Banana Wind Album. It was released on June 4, 1996 by MCA and Margaritaville Records. The song was written to tell the story of the Jamaican Police’s mistaken belief that Jimmy’s plane was a marijuana smuggling enterprise. His aircraft was damaged by gunfire but nobody was injured.