Lessons from Tony Bennett’s $7 Mill Estate Dispute

When singer Tony Bennett died in July 2023, he left behind a musical legacy spanning from the 1950s to the present day, an estate reportedly valued at $7 million, and, unfortunately, an estate dispute that might have been avoided. Though he had established a trust in 1994, well before he was diagnosed with Alzheimer’s disease in 2016, the choices he made in how the trust was set up and run set the stage for the lawsuit filed by his daughters. Examining what he could have done better illuminates problems with estate planning and trust administration that can increase the risk of litigation.

How the Trust Was Set Up

It’s thought that Tony Bennett earned up to $100 million in his lifetime, in part thanks to a career revival in 2012 due to his performances with Lady Gaga, with whom he recorded two albums of duets, and other contemporary musicians. When he established his trust, he named himself and his son Danny as co-trustees. In addition, Bennett formed an LLC to hold certain property and assets, and Danny was a manager of that LLC. Bennett’s children and the family trust held membership interests in the LLC. On top of all that, Danny was also his father’s manager.

The trust was at least partially funded, meaning that formal ownership or title to some (if not all) of Bennett’s assets was transferred to it. Bennett’s will also stated that any tangible personal property that had not been transferred to the trust was to be distributed to the children equally. Due to his celebrity status, property, pictures, and assets bearing Bennett’s likeness could have a high potential value.

The lawsuit filed by Johanna and Antonia, Bennett’s daughters, alleges that Danny did not account for and disclose all trust assets or transactions involving those assets. The suit also claims that Danny improperly received personal benefit from transactions he made on behalf of the estate.

The Alleged Improper Actions

Whether all the allegations in the lawsuit prove to be true, it is clear that Danny had significant conflicts of interest in his role as co-trustee and was in a position to exert undue influence on his father. In July 2022, many years after Bennett had been diagnosed with Alzheimer’s, Danny sold items of Bennett’s memorabilia and his name and likeness. It is alleged that Danny received a large commission on that sale through RPM Productions, his company.

Danny also allegedly sold some of Bennett’s personal property at auction without providing appropriate disclosure and notice to his sisters. The issue here is not simply the monetary value, but also the sentimental value the items may have held and the right of the beneficiaries to control what happened to them. In 2020, Danny also allegedly received loans of $1.2 million (again, after the Alzheimer’s diagnosis, which would have thrown Bennett’s testamentary capacity into doubt). He also received a 25% commission on certain work that he performed with his father.

The Necessity of Transparency and the Value of a Professional Trustee

Regardless of the outcome of the litigation around Bennett’s estate, everybody in the family loses. Relationships are destroyed and substantial sums are spent on legal representation to resolve the issues. However, their cautionary tale can provide valuable lessons for others.

The lack of transparency and open communication around Danny’s actions is a common issue that prompts estate and trust litigation. Secrecy and failure to disclose erode trust and almost inevitably lead to the suspicion that a trustee is hiding improper actions. Trustees should always maintain clear communication on every action taken regarding trust assets with the beneficiaries to avoid the appearance of wrongdoing.

With an estate of this size and the complicated nature of the different types of assets belonging to it, including significant intellectual property, the family should probably have considered using a professional or corporate trustee rather than a family member. Danny’s various roles as co-trustee, manager of the LLC, and his father’s manager gave rise to many situations in which he had an obvious conflict of interest. The risk was only heightened by the fact of Bennett’s Alzheimer’s, which would have made him more susceptible to coercion or undue influence. Using an independent, professional trustee would have provided protection for all the beneficiaries and avoided putting Danny, as a trustee, in a position where his ability to put the interests of the trust above his own was in doubt.

Expert Legal Guidance for Complex Estate Planning and Administration

If you’re concerned that your efforts to safeguard your legacy and provide for your beneficiaries will only end in expensive legal battles after you’re gone, it does not have to be that way. The experienced estate law attorneys at NM Law can help you craft a comprehensive estate plan that keeps your assets out of probate, minimizes your tax burden, and reduces the risk of disputes. Just as important as establishing a good estate plan, is making sure it is properly administered. Our work as trust and probate litigators gives us practical insight into what can go wrong and how to create effective solutions. To schedule your consultation, contact us here today.