Anyone who likes to go hiking, biking or camping likely knows what Gore-Tex is. The waterproof fabric turned the W.L. Gore Company into a billion dollar success, ranking #134 on Forbes’ recent list of largest private companies.
Like many successful business owners the founder, Bill Gore passed, and his wife Genevieve Gore, created a trust fund to help pass their stock in the company onto their children and grandchildren. They did a good job too, funding the trust through a holding company to minimize estate taxes. Bill passed away in 1986 and his wife later died in 2005, sadly setting the stage for a nasty battle between the Gore-Tex heirs.
The way the Gores set up the trust created five equal shares for each of their five children. They then created a supplemental trust so that each of their grandchildren would similarly receive an equal amount of stock in the company. The plan worked exactly as it should, the only problem was that one child felt slighted as the only one of the Gore’s children to have three kids of her own. The rest of the offspring had four children. Under the formula established by the trust, that meant her family would receive less stock than each of the families of her siblings. Her three children would obviously receive less stock than if she’d had four kids.
The heir, Susan, led an effort to change the trust but the beneficiaries did not go along with it. She also tried to have her mother change the plan, but that too failed. She then decided to get creative, considering adopting one of her grandchildren as a “child” thus capturing a larger overall share of the family’s stock. The problem with this plan is that her ex-husband refused to go along with it. He instead suggested she adopt him.
Rather than reject the idea as ridiculous she did exactly as he suggested, adopting her 65-year-old ex-husband in 2003, unbeknownst to the rest of her family. At the time she had her ex-husband/child sign a document promising that he would not retain any financial benefit from the scheme, giving his children all stock he received.
As is so often the case when big money is involved, the ex had a change of heart and decided to keep the money. A judge in Delaware ruled that he was not entitled to the money as he had agreed specifically not to keep it. The next step was fighting her now outraged family members about the legality of the adoption. The family argued the adoption was a farce and ran counter to the original intention of the trust.
The Supreme Court of Delaware finally ruled on the issue this past week. It held that even if the adoption was legal, an adoption of a grown man for strategic reasons did not fit within the intent of the trust. Her very unusual ploy failed.
This case shows what great lengths some people will go to when they want more of the family fortune. Probate court fights over wills, trusts and estates are common in billionaire estates and more modest ones alike. That’s why doing the proper estate planning ahead of time is so important. While a good estate plan can’t always prevent a nasty fight, it can improve the chances of your wishes being followed. If you have questions or concerns contact the Huntsville wills and estates attorneys at Martinson & Beason, P.C. today.
Source: “Gore-Tex Heiress’ Adoption Of Ex-Husband Fails To Score More Stock,” by Danielle Mayoras, published at Forbes.com.