Celebrity Estate Planning - Doris Duke - Episode 92
Hey there, Legal Tea Listeners! This is your host, Jenny Rozelle. Today, we’re on the “estate planning of the rich and famous” topic and for today’s episode, we’re going to dive into what happened following the death of Doris Duke. Now, to be honest, it’s a name that I didn’t really immediately recognize, but while she may not be as well-known as some other figures we’ve done on these celebrity estate planning episodes, there is absolutely denying her wealth. According to a Forbes article, Doris, who died in 1993, passed away with about a $1.3 Billion (with a B … as in Boy) fortune. Now, I’ve had a lot of celebrities on these episodes have multiple millions … but very few have dipped into the billions. Well, Doris Duke gets added to that short list. So, let’s talk a little about Doris, as a person first, and then get into what happened following her passing … and what we can learn from what happened.
According to her Wikipedia page, this is how they describe Doris: She was an “American billionaire tobacco heiress, philanthropist, art collector, horticulturalist, and socialite. She was often called the ‘richest girl in the world.’” So, Doris was the only child of James Buchanan Duke and Nanaline Holt Inman, which was James’ second wife. At James’ passing, a majority of his Estate was distributed to Nanaline and Doris. Most of Doris’ childhood was spent growing up on “Duke Farms” which was a 2700 acre property in New Jersey. Through James’ estate proceeding, Doris actually ended up successfully suing her mother, and other executors of James’ estate, to block the sale of various real estate. One of the pieces at issue was a mansion in Manhattan, which later became the Institute of Fine Arts at New York University. Kind of a cool fun fact!
Later on, when her mother, Nanaline, passed away, Doris got some of her personal property (jewelry, for example) and an additional large chunk of change. Using her wealth distributed from her father and mother, she actually did a lot of good – she worked at a canteen in Egypt for literally a $1/year; she became a wildlife refuge supporter; she developed an interest in horticulture and started Duke Gardens – a public garden; that’s just to name a few. I mean, she could have done worse things with her money, right?!
Throughout her life, Doris married two times (and got divorced two times) – ultimately, she passed away technically a single woman. In 1985, Doris met a lady named Chandi Heffner, who was 32 years old at the time, and according to Biography.com, Doris believed that Chandi was the reincarnation of her daughter, Arden, which Arden had passed away as a tiny infant. Arden actually died one day after Doris had her. So, Doris became fixated on the fact that Chandi was Arden reincarnated, according to Biography.com. So, in 1988, when Doris was 76 years old, Doris adopted Chandi making Chandi, technically speaking, a legal daughter of Doris. Around this point in time, Chandi introduced Doris to Bernard Lafferty – which will be an important name to remember – and Bernard became Doris’ butler.
In 1992, Doris had done a facelift procedure and after the procedure, she was on some medications causing her to be a bit dizzy. She fell, broke some bones, and ultimately found herself in the operating room for surgery. After surgery or two later, she went home (after a stint in the hospital) and had a severe stroke which resulted in cardiac arrest. Sadly, Doris ended up passing away on October 28, 1993 at the age of 80. After her passing, an estate plan was located – so at least we don’t have another celebrity estate planning episode with a celebrity without a plan. Though, even though Doris did have an estate plan, that certainly did not eliminate drama from happening.
According to a Los Angeles Times article, Doris left a Last Will and Testament which named many charitable organizations as beneficiaries – some were existing, some were brand new. That was not all too startling because through Doris’ life, she was very giving, in nature, with her time and money to causes she was passionate about. Perhaps most strange about Doris’ Will was who she named as her Estate’s Executor. Remember the butler, Bernard? Oddly, it was him. When it was time to get things rolling, Bernard turned around and named a trust company, US Trust, as a co-executor.
After Doris’ estate really got rocking and rolling, that’s when lawsuits started flooding in – one lawsuit was brought by Chandi, the young woman she adopted when Doris was 76 years old, and Chandi was contesting the Will because Doris had specified she actually did not want Chandi as a beneficiary due to their “falling out.” There are some sources that claim that Doris even attempted to negate the adoption, but even though Doris tried to 1) write Chandi out and 2) negate the adoption, Chandi’s lawsuit against the estate was, at least, somewhat successful because Chandi and the estate ultimately settled giving Chandi $65 Million Dollars.
Another couple of smaller lawsuit, before we get to the big one involving Bernard, was first, a nurse by the name of Tammy Payette came out and said that Bernard and a “high-up” Beverly Hills Doctor, Dr. Charles Kivowitz, had, according to Wikipedia, “conspired to hasten Duke’s death with morphine and Demerol.” Though, ultimately, the District Attorney’s Office got involved and found there was no evidence of foul play. The other smaller-ish lawsuit involved Duke University—so they claimed that they were entitled to a larger share of Doris’ estate. Honestly, I tried to look and look to find out what gave them the thought that they were possibly entitled to more – but I couldn’t really find too much. But, I did find an interesting whole web page on Doris Duke on Duke University’s Library website, which I found interesting, and I linked it in the source links for this episode. It has some cool pictures of Doris when she was a kid, some family pictures, and some pictures of some of her family’s land (like Duke Farms which was something I mentioned earlier).
Yet another lawsuit, which really was the most dramatic piece of Doris’ estate, was brought by Doris’ Doctor, Harry Demopoulos, who prior to Doris changing her Will to appoint Bernard as the Executor, Harry was actually appointed as the Executor in the prior Will. Harry contested the Will and estate, too, and specifically argued that Bernard had schemed his way into become the one in control of Doris’ estate. According to Wikipedia, the estate was litigated for about 3 years and had about 40 lawyers/10 law firms involved – which the legal fees were around $10 Million Dollars, paid by the estate. Ultimately, the Court ended up removing Bernard AND US Trust as the Executors – according to an article that LegalZoom put out, Bernard was removed “for using estate funds for his own support and US Trust [the trust company appointed as co-executor] for failing ‘to do anything to stop him [Bernard].” In lieu of Bernard and US Trust, the Court appointed, among a few others, Dr. Harry Demopoulos. Ultimately, a majority of Doris’ wealth and estate went to fund the Doris Duke Charitable Foundation.
I caught an article in the Los Angeles Times that primarily was about Bernard – and it was a piece written shortly after Bernard himself died. While Doris died in 1993, Bernard died just three years later in 1996. I happened to be skimming that article and it referenced that through all the craziness and drama regarding Bernard serving as Executor, there ultimately was a settlement agreement that was reached between Bernard, the estate, and those contesting the Will/estate. In the Los Angeles piece about Bernard’s death, it referenced that part of the settlement agreement was that Bernard received a bequest of $500,000 a year, per the agreement removing him as the Executor. Furthermore, the article also shares that Bernard received around $4.5 Million Dollars in “Executor fees.” And lastly, the article referenced a gated mansion worth around $2 Million Dollars that Bernard resided in, at his passing. He didn’t do too bad for someone that did not know Doris for all too young and was her butler. The article mentioned that they are unsure if Bernard had an estate plan – and where his estate would end up going. But my nerdy brain and nosy self would love to know that…
As we start to wrap up this episode, I think the big takeaway from this Legal Tea episode on Doris Duke is two things – 1) First, you absolutely should think long-and-hard about WHO is going to serve as the one in charge; 2) Second, consider putting stipulations in place on how an Executor is compensated. So, let’s start with the first point – I think all too often people’s brains just default to children and/or the “oldest child” to serve as the one in charge. In fact, from my seat and perspective, I really don’t care if someone is family or not – instead, I’d be looking for certain skillsets and attributes in a person. If a child happens to have those skillsets and attributes, then great! I also don’t know who needs to hear this – but picking one child is not picking a favorite, I promise. Serving in the Executor is A LOT of work … it’ll take that person a lot of time and energy, so in fact, I’m not sure it’s picking the favorite – or the actual opposite!
Then, from a compensation standpoint, that person is absolutely entitled to a compensation. There are, sort of, two popular methods of computing a compensation for serving in this role, at least here in Indiana. The first popular type of computing a compensation is to track time and take an hourly fee. You, in your estate plan, could even put in what YOU think is a fair hourly rate – that way, it takes the burden off of them on what they should take. The second popular type of computing a compensation is a set fee and it be about ½-ish of what the attorney is getting as their fee. There are pros and cons about both of these computations, so if you’re serving in that role and taking a compensation, first of all – don’t feel bad. Take a fee! And second, lean on your attorney to help determine what a fair and reasonable fee is – and how to compute what your fee will be. Just don’t be like Bernard … it sounds like he possibly took advantage of the situation. If that DID happen, just do not be like ol’ Bernard, okay?
Alrighty, I think we’re ready to wrap this episode up, shall we? Next week we’re back to a “cautionary tale” episode where we talk about real-life clients, real-life cases that I, or my office, have worked on. During that episode, we’re going to be talking about a case where someone waited until the 11th hour to do an estate plan – they were in the hospital and ultimately, we didn’t get the plan signed because he wasn’t of sound mind. So, next week, we’re going to talk about that story and dive into when it becomes “too late” (which is way more “gray area” than you probably think it is). So, tune in for that next week, but until then, Legal Tea Listeners,– take care and be well!