He may have had the reputation as a laid-back icon of easy-going “beach rock,” but legendary singer and songwriter Jimmy Buffett was also a smart businessman. Buffett, best-known for “Margaritaville” fame, died in 2023 and left behind a business empire valued at $275 million – including a chain of Margaritaville-themed restaurants, bars, casinos, and hotels. 

Buffett, by all accounts, also did careful estate planning, setting up a “marital trust” for the sole benefit of his widow, Jane, whom he married in 1977. With Jane as one co-trustee, Buffett also named as the other co-trustee his longtime business manager and financial adviser, Richard Mozenter. Now those two are locked in a legal duel, the widow accusing Mozenter of ripping off the trust and the trustee accusing Jane Buffett of interference and self-interest. 

The stakes are high. Mozenter stands to lose millions in fees. Jane Buffett stands to lose millions in direct benefits from the trust. In this recent article from CNBC, reporter Robert Frank describes the court battle that’s currently brewing. He also notes how the Buffett case offers important lessons for families planning wealth transfers. Let’s take a look to see what lessons we can learn. (We’ve edited out a few details due to space constraints.) 

Buffett Case Highlights Broader Issues Regarding Wealth Transfer 

Frank begins his article with an overview of the case, a legal battle already being used as an example by experts to dig deeper into how the passing of wealth to spouses and families can go wrong, even when it seemingly was planned properly.  

It all started last week (as far as the public is concerned) when Jane Buffett—the late singer’s widow—filed a petition in Los Angeles court to remove her co-trustee, Richard Mozenter, from the marital trust created to support her.  

Frank writes, “Jane Buffett, who married Jimmy in 1977, alleged that Mozenter has been ‘openly hostile and adversarial’ toward her and has refused to give her details on the trust and its financials. She alleged Mozenter is collecting ‘excessive fees’ of $1.7 million a year and that he’s mismanaging the trust assets, projecting income of only $2 million, implying annual returns of less than 1 percent.” 

In return, Mozenter has filed his own lawsuit in Palm Beach County, Florida. He alleges that Jane has been “completely uncooperative” in his efforts to manage the trust, interfering with business decisions, refusing to meet with him, and breaching her duties by “acting in her own interest.”  

After Building a Business Empire, Buffett Planned Carefully 

Because of the high-profile nature of the case and Jimmy Buffett’s highly successful career and business empire, much light has been shed on his estate planning in an effort to understand what went wrong to lead to this legal battle.  

“Buffett planned carefully for the afterlife,” Frank explains. “His will, first written more than 30 years ago and amended in 2017 and again in 2023, directed that most of his assets be placed in a marital trust for Jane. The trust was created ‘for the wife’s sole benefit of her lifetime,’ according to legal filings. The three children they shared — Savannah, Delaney and Cameron — are the so-called remainder beneficiaries of the marital trust, which means they will receive any remaining assets left after Jane’s death.” 

As co-trustee to manage the trust alongside Jane, Buffett appointed Mozenter, an accountant who had worked as his business manager and financial advisor for three decades.  

When Co-Trustees Battle, Disputes Can Become Bitter and Costly 

Not long after Jimmy’s death, Frank tells us, the relationship between the two co-trustees deteriorated.  

“In her complaint, Jane Buffett said Mozenter refused to provide her with basic financial information about the trust,” Frank writes. “He ‘belittled, disrespected, and condescended Mrs. Buffett’ in response to her request for information, she said. She said his fees of $1.7 million a year to manage the trust were ‘enormous.’” 

Mozenter continued to delay when Jane asked for her projected income from the trust. It was only after she enlisted the help of a trusted friend that Mozenter finally provided her with an estimate of $2 million a year.   

Jane claims that Mozenter acknowledged that Margaritaville had paid distributions of $14 million over the previous 18 months. But he declined to make future projections. “Based on that analysis, Mr. Mozenter told Mrs. Buffett that the Marital Trust’s income would not cover her annual expenses and advised that she could ‘consider adjustments,’” according to her complaint. 

Attorneys Anticipate a “Growing Wave” of Trust-Related Lawsuits 

Sadly, the Buffett case is not an uncommon one. Trust lawyers say that the case is part of a “growing wave of lawsuits” connected to inheritances and trusts. According to Cerulli Associates, over $100 trillion of wealth is expected to be passed down from older generations to spouses and families over the next quarter of a century. “More wealth being passed down means more litigation, since families often fight over who gets what,” Frank adds.  

But this specific case centers around “dueling trustees,” an equally common conflict. Buffett could have made Jane the sole beneficiary and the sole trustee. But he chose to include Mozenter to help manage and direct the trust.  

“Attorneys said appointing a co-trustee is common,” Frank writes. “Sometimes the inheritor is ill-equipped to handle the wealth or asset. Sometimes they’d rather leave the details to someone else. Whatever the reason, tensions between the beneficiary and co-trustee often erupt into full-blown hostility.” 

Battles Between Beneficiaries and Trustees Share Common Themes 

“These cases almost all turn on the exact same issue,” says Keith A. Davidson, with Albertson & Davidson LLP. “You’ve got a beneficiary who doesn’t feel like they’re getting enough information and doesn’t feel like they have any say. And you have a trustee who is being too paternalistic, and they feel like they can give out information [that] they want. That’s a recipe for disaster.” 

Frank notes that these emotions run especially high when one of the trustees is a spouse.  

From Mozenter’s perspective, he says he was just doing as Jimmy asked. According to him, Jimmy “repeatedly expressed his concerns regarding Jane’s ability to manage and control his assets” and was “very careful to create the trust in a manner that precluded Jane from having actual control over the trust.” He added, “This fact has made Jane very angry.” 

Stewart Albertson, also with Albertson & Davidson LLP, puts it this way: “Imagine you’re married to Jimmy Buffett for 47 years, you have a say in how you’re spending your money and what you’re doing and all that goes away overnight.” In other words, no wonder she’s angry. 

Judges Will Determine What Happens Next, and Where 

So, what happens next? Frank tells us that since the lawsuits were filed in different states, the courts will decide first where the case will be heard. Only then will a judge start the arguments and scout a path forward.  

“Attorneys said judges have typically sided with the outside trustee (in this case Mozenter). Yet increasingly, they have been siding with spouses — which could mean Mozenter is removed,” Frank writes. “More likely, attorneys said, a judge will determine that the relationship between Mozenter and Jane is unworkable and name a new, professional or corporate trustee from a trust company or bank to replace them both.” 

Alex Weingarten, a managing partner of Willkie Farr & Gallagher LLP in Los Angeles, explains, “My guess is a judge is likely to put in someone as a professional fiduciary. That would allow the fiduciary to get in and figure out what’s going on. It’s not what she wants, but it would give credence to her argument.” 

Buffett Case Reveals “Important Lessons” as Families Transfer Wealth 

While most of us might not be able to relate to a multi-million-dollar business empire and celebrity career, Frank says that there are two important lessons that families planning wealth transfers can learn from this case.  

First, wealth holders should communicate the plans for their estates before they die, so that no one is surprised. It’s likely that if Jimmy had clarified the co-trustee roles to Jane and Mozenter, some of the conflict could have been mitigated. He also could have included a “removal right” in the trust, which would have given Jane an easier path to removing Mozenter if she wished to.  

“Jimmy did good planning, in that he set these trusts up,” Davidson says. “But he didn’t think about how this was actually going to play out.”  

Good Friends May Not Make Good Trustees 

Second, friends or business associates don’t always make good trustees. Frank explains, “While today’s wealthy often name a trusted friend to a family trust, the trustee may have a different relationship with the beneficiary and can see themselves as carrying out the wishes of the descendant — which is not the job of a trustee.” 

Albertson says, “In terms of problem cases, the ones we see, they rarely involve professional trustees. It’s almost always somebody who’s a friend. That tends to be the worst. Your role is to follow the trust terms.” 

While no one wants to see things get messy like this in the wake of a beloved celebrity’s death, it will be interesting to see how this case plays out and whether any more lessons can be learned for our own long-term planning.  

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(originally reported at www.cnbc.com)