Two weeks ago, John Goodman was found guilty of DUI, manslaughter and vehicular homicide in the USA.
The charges related to an incident that occurred on 10 February 2010 when Mr Goodman, an air-conditioning mogul from Palm Beach Florida, allegedly ran a stop sign in his Bentley convertible and struck a Hyundai being driven by Scott Wilson, a 23 year old civil engineering student. Wilson’s car landed in a nearby canal where the young man drowned.
The criminal proceedings coincide with a wrongful death civil suit filed by Wilson’s parents.
Fortunately for Goodman, he had set up a very large trust fund reportedly worth several hundred million dollars for the benefit of his children that is beyond his control. So far as his lawyers are concerned it is also beyond the grasp of Wilson’s parents should their case prove successful. What makes this case particularly interesting however, is the fact that one of those children is also his 42 year old girlfriend.
At the advice of Goodman’s estate planning attorney, Goodman has recently adopted his girlfriend, Heather Laruso Hutchins, making her a beneficiary of the Trust. The craftiness of this situation would be that the parents of Mr Wilson would be unable to claim the Trust funds as a component of their lawsuit in the event that they are successful.
According to a recent article on slate.com there is actually a growing trend in the United States of adopting one’s adult lover or spouse for the associated estate planning benefits.
Before you race out and adopt your significant other here in Australia, there are a number of implications that you will need to consider:
- Whilst in an earlier decision, Palm Beach County Circuit Judge Glenn Kelley ruled that the Trust Fund that Goodman had created for his children was “off limits”, in a recent decision, Judge Kelley ruled that when a jury decides next month whether Goodman should pay Mr Wilson’s parents for the death of their son, they will be able to consider the millions of dollars that Goodman’s girlfriend is now a beneficiary to. As Judge Kelley stated, “the Court cannot ignore the reality of the practical impact of what Mr Goodman has now done. [Goodman] has effectively diverted a significant portion of the assets of the children’s Trust to a person with whom he is intimately involved at a time when his personal assets are largely at risk in this case”.
- The second implication is whether or not Mr Goodman could be charged with incest, which pursuant to Section 222(5) of the Criminal Code Act 1899 (QLD), is defined to include without limitation, sexual relations with adoptive offspring or other lineal descendants.
Rumors are currently swirling that the civil matter has been resolved by an out of court settlement. In any event however, in my view, whilst Mr Goodman’s estate planning attorney’s approach was a novel one, it is not one that I believe carries prospects of success in Australia.
Whilst it is important to consider asset protection in your estate planning, this case probably takes it a bit too far!
Please contact me if you have any questions regarding Asset Protection and Estate Planning.