One of the questions I hear most often as I talk with people about estate planning is “What do you think about the online do it yourself legal websites?” My response is usually something along the lines of, “you get what you pay for;” the Gore-Tex case demonstrates the truth in this statement.
Bill Gore, inventor of Gore-Tex, the well known, breathable, water-proof fabric used in hiking and camping gear, and his wife Genevieve Gore, had a living trust prepared in 1972 to pass on their stock to their children. They also established a supplemental trust for their grandchildren, ensuring all of their grandchildren received an equal share.
W.L. Gore and Assiciates’ annual revenue is around $3 billion, needless to say, there is a lot of money on the table. So why are we talking about this?
The Gores had five children, each of the five children had four children, that each of them except one, Susan, who only had three, which would mean in total, her family would have a smaller total share in the company than would her four siblings. Susan exercised a bit of creativity and decided she would adopt one of her grandchildren as a her child, thus making them her child and a grandchild to Bill and Genevieve Gore, entitled to an additional portion of stock. However, her ex-husband refused to sign off on the plan, and instead suggested she adopt him, which she agreed to do.
After signing an agreement that he would not keep any financial benefit from the arrangement and only hoped to get his children more stock, Susan adopted her ex-husband.
Of course after the adoption, the ex-husband/adopted son turned on his ex-wife/mother and decided to keep the financial benefit of his “grandparents” generosity. Susan tried to cancel the adoption, but it was too late. Fortunately, she was able to produce the signed agreement, and Susan won.
Then she tried to keep the share of stock the court refused her ex-husband, which was challenged by her other siblings, and Susan lost.
Because the court decided even if Susan’s adoption of her adult ex-husband was legal, the trust was intended to benefit those grandchildren who enjoyed a parent-child relationship, and an adoption of a grown man for strategic reasons did not fit within this intent. While the trust from 1972 did not contemplate this specific scenario, it did contain clear enough definitions and direction to allow the court in infer intent, this allowing Bill and Genevieve Gore’s intent to be carried out and not side stepped by legal antics.
Would a do it yourself will or trust be able to withstand such legal maneuvering? Perhaps, but I would say it would be uncertain. The benefit of the professionally drafted trust from 1972 paid off, the Gores’ desired distribution was honored and enforced, over 30 years later, indeed, they got what they paid for.