Estate Planning Lessons from the Movies – Part I

I like to draw inspiration for my blogs from articles and other blogs that I read. Anytime those sources pull from real life, it piques my interest. After all, Estate Planning focuses on real life and the most real and inevitable part of life, death. Earlier this week, a headline titled “Eight Lessons from Killers of the Flower Moon” caught my eye, and the idea for this blog took hold. The article talks about the movie titled “Killers of the Flower Moon” that hit theaters late last month to critical acclaim, but that’s not all it discusses. The article lays out the many real-life Estate Planning lessons that we can learn from watching the movie. This first part of a two-part series will delve into the plot of the movie and start introducing the lessons. The second part will finish exploring the lessons.

Before we get into the lessons, it’s important to understand a bit about the plot of “Killers of the Flower Moon.” The film focuses on the “Reign of Terror” which was the name given to the period when white “caretakers” murdered members of the Osage Indian Tribe to steal their rights to the oil under their reservation. After the oil was discovered, each member of the tribe received a “headright” or share in the oil money. The tribe members could devise or distribute, but not sell, that right. Anyone could inherit the headright which meant that outsiders sought to marry into the Osage tribe or otherwise become an heir to one of the members of the tribe. This led to the murder of countless Osage tribe members. As if the murders were not tragic enough, the federal government decided to impose restrictions on the tribe’s financial autonomy and required tribe members to take a test regarding their competency to manage their own estates. Every tribe member failed, and the Bureau of Indian Affairs assigned each a white guardian to oversee their spending. It’s unclear whether the guardians had any training, but the article makes clear that the guardians were corrupt and completely unnecessary.

The story alone is fascinating, but it becomes even more interesting when viewed through an Estate Planning lens and with an eye toward learning from mistakes of the past. The first lesson we can take is understanding and appreciating the importance of fiduciary duties. Setting aside the question of whether the guardians were necessary, guardians or trustees, as we know them, have fiduciary duties that they must uphold. Without question, those tasked with guarding the Osage failed miserably in this regard, especially because many of them ended up murdering their charges. In the Estate Planning world, fiduciary duties are sacrosanct, and the fiduciary must always put the beneficiary’s needs before the fiduciary’s own self-interest. Choosing the right person to serve as fiduciary makes a plan; likewise choosing the wrong person to serve as fiduciary breaks it.

The second lesson is to know your beneficiaries. Any time that an individual serves in a fiduciary capacity, it’s important that they know and understand their beneficiary. The trustee/guardian relationships served no purpose for the Osage. The government established those relationships in bad faith, and the relationships were borne out of greed and racism. Prior to the creation of these relationships, the Osage negotiated ownership of their land and contracts with the government relating to the oil rights so it’s clear that they needed no help in managing their finances. A fiduciary must recognize what their beneficiary needs and determine how to address those needs either through the trust or another entity. Undoubtedly, a Trustee must exercise their discretion for the benefit of their beneficiaries.

Third, sudden wealth destabilizes. We have all heard stories about how lottery winners end up penniless, or that even those that come from wealth end up losing the family fortune. A sudden change in fortune changes things. People have unique views about money and just because an individual’s fortunes change, doesn’t mean that their view on or relationship with money does. Many a relationship has ended because the parties disagreed about how to spend their funds. If we know how a beneficiary views money, and understand their need for it, we can create a plan that addresses that need and viewpoint. This lesson piggybacks off the first two and underscores why choosing the proper fiduciary and understanding your beneficiary both matter. The relationship between the fiduciary and beneficiary will change because of the money involved.

The final lesson from this first part of the series is perhaps the most sobering. Addiction knows no tax bracket. Some movies and television shows cast alcohol and drug abuse as problems of the poor, but nothing could be further from the truth. Those with unlimited resources or who never hear the word “no” run just as much a risk for addiction as those without resources. Again, this underscores the importance of choosing a proper fiduciary and understanding the beneficiary. If the beneficiary struggles with addiction, the fiduciary needs to know that and the trust needs to have the tools to address that beneficiary’s addiction.

While the movie sounds intriguing because of the plot, I’m excited to watch it through the lens of an Estate Planning professional. The lessons discussed in this first part of a two-part series have real-life application. If you have concerns regarding your Estate Plan or any of its provisions, make it a point to talk to contact me so that we can discuss the nuances.