The court battle with the late singer Jimmy Buffett’s $275 million property highlights an increase in trillion dollar lawsuits in wealth that have been handed over to spouses and families, experts said.
Jimmy Buffett’s widow, Jane Buffett, filed a petition last week with a Los Angeles court to remove her co-trust, Richard Mosenter, from the couple’s trust created to support her after the singer’s death in 2023. She argues that Mozenter is collecting $1.7 million in “excessive fees” per year, and that he mismanages his trust assets, projecting just $2 million in revenue, meaning that his annual revenue is less than 1%.
Mogenter filed his own lawsuit in Palm Beach County, Florida, claiming Jane is “completely uncooperative” in her efforts to manage the trust. He said Jane had interfered with business decisions, refused to meet with Mogenter, and violated the fiduciary’s obligations by “acting in her own interests.”
The incident shines a spotlight on the real estate plans and business empire left behind by singer Jimmy Buffett, famous for hits such as “The Margaritaville” and “The Cheeseburger of Paradise.” In addition to his catalogue of songs, Buffett has left his home, cars, planes and millions of dollars in stock in his brand business.
Musician Jimmy Buffett will perform on stage at Jimmy Buffett & Friends, a concert held by CMT on the beach in Gulf Shores, Alabama on July 11, 2010.
Rick Diamond | Getty Images Entertainment | Getty Images
Buffett planned carefully for the afterlife. His will was first written more than 30 years ago, revised in 2017 and again in 2023, directing that most of his assets would be placed in the trust of Jane’s couple. According to legal filings, trust was created “for the sole benefit of the wife’s life.” The three children they shared – Savannah, Delaney and Cameron – are the so-called remaining beneficiaries of the couple’s trust. This means receiving the remaining assets left after Jane’s death.
Jimmy Buffett also sought a joint trust to manage her trust with Jane. He appointed Mozenter, an accountant who was his business manager and financial advisor for 30 years as a joint trust tee.
The asset buffet on the left was quite impressive. A successful businessman and entrepreneur, Buffett has built a brand empire and merchandising business that far surpassed his singing rights and tours. According to the filing, the property’s assets included $34.5 million in property. $15 million stake in a company called Strange Bird Inc. $2 million music equipment. A $5 million vehicle. Other investments cost $12 million.
One of its biggest assets is Buffett’s stake in Margaritaville, a chain of restaurants, bars, hotels and merchandising that commercialized Buffett’s lifestyle. According to the filings, Buffett’s capital in Margaritaville was estimated at $85 million held in the JB beta. The Margaritaville currently has 30 restaurants and bars, 20 hotels, vacation clubs, casinos, cruise ships and products.
However, shortly after Jimmy’s death, the relationship between the two joint trust deteriorated. In her complaints, Jane Buffett said Mogenter refused to provide her with basic financial information about the trust. He responded to requests for information and “was downplayed, neglected, tolerated Mrs. Buffett,” she said. She said his fee of $1.7 million a year to manage the trust was “huge.” Mogenter stayed behind when she sought the expected income from the trust. Finally, after she asks for the help of her friend Jeff Bakes, a former Time Warner Chief Mogenter, then gives her a $2 million annual estimate.
(LR) Jimmy Buffett and Jane Slagsboll will be taking part in the 2022 Vanity Fair Oscar Party hosted by Radica Jones of the Wallis Annenberg Center for Performing Arts, held in Beverly Hills, California on March 27, 2022.
Arturo Homes | FilmMagic | Getty Images
According to Jane’s complaints, Mogenter admitted that Margaritaville has paid a $14 million distribution over the past 18 months. However, he refused to make predictions for the future. “Based on that analysis, Mr. Mogenter told Mr. Buffett that the income from the couple’s trust would not cover her annual expenses, and advised that she could “consider adjustments,” according to her complaint.
The trust lawyer said the case was part of a wave of litigation related to inheritance and trust. More than $100 trillion in wealth over the next 25 years is expected to be passed on to spouses and families over the next 25 years, according to Cerulli Associates. Taking over wealth means more lawsuits as families often fight over who gets what.
The Buffett case reflects different but equally common causes of conflict: the duel trustee. The real estate attorney said Buffett was able to make Jane the sole beneficiary and the sole trustee. However, he chose to have Mozenter as a joint trust to help manage and direct the trust.
During his lifetime, Mogenter said Jimmy “he repeatedly expressed concerns about Jane’s ability to manage and control her assets,” and “was extremely cautious in order to create trust in ways that prevent Jane from actually controlling her trust.” He added, “This fact made Jane so angry.”
The lawyer said it is common to appoint a joint trust. The heir may not be equipped to handle wealth or assets. Sometimes they would rather leave the details to someone else. Whatever the reason, tension between the beneficiaries and the joint trust often erupts in full-scale hostility.
“These cases turn on almost the same problem,” Keith A. Davidson said, Albertson & Davidson LLP. “You have beneficiaries who don’t feel well-informed, they don’t feel like they have a say. And you have too-paternal councillors and you feel they can inform what they want. That’s a disaster recipe.”
Feelings are particularly high when one of the trustees is a spouse.
“Imagine you’ve been married to Jimmy Buffett for 47 years. You’re saying you’re spending your money, what you’re doing, and everything’s apart overnight,” Stewart Albertson also said, Albertson & Davidson LLP.
As the lawsuit was filed in different states, the court must first decide where the case will be heard. The judge then begins the discussion and ultimately decides the path to advance. The lawyer said judges are usually on the side of an outside trustee (in this case Mozener). But increasingly, they are being monitored along with their spouses. This could mean that the mogenter will be removed.
Perhaps the lawyer said the judge would determine that Mogenter and Jane’s relationship was infeasible and would name a new, expert, or corporate trustee of the trust company or bank to replace both.
“We’ve seen a lot of experience in the entertainment litigation,” said Alex Weingarten, managing partner of Wilkie Far & Gallagher LLP’s Los Angeles office and chairman of the Entertainment Litigation Committee. “It allows the trustee to understand and grasp what’s going on. That’s not what she wants, but it gives her credibility into her argument.”
The lawyer said Mozenter’s $1.7 million fees are not necessarily excessive. Regarding the $275 million annual return of $2 million, evidence of mismanagement, the lawyer says that many of the trust’s assets, including real estate, planes, and cars, do not generate income and will not generate any costs to maintain them. Therefore, the actual profit margins of income-produced assets can be high.
Singer-songwriter Jimmy Buffett will perform with Coral Reefer Band at the Omni Coliseum on September 4, 1976 in Atlanta, Georgia.
Tom Hill | Wire Images | Getty Images
Still, the lawyers said the Buffett case provides two important lessons to families planning to transfer wealth. First of all, no one is surprised because they said that the property holders should tell them their property plans before they die. If Buffett had explained the role of the joint trust to both Jane and Mogenter, the tension would likely have been kept to a minimum.
“Jimmy had a good plan in terms of setting these trusts into place,” Davidson said. “But he wasn’t thinking about how this would actually unfold.” He could have also added “deletion rights” to his trust, making it easier for Jane to remove Mogenter if he wanted.
The second lesson is that friends and business associates don’t always create good trustees. Although today’s wealthy people often name them trustworthy friends of family trust, trustees can have different relationships with beneficiaries and can be seen as carrying out the wishes of their descendants. This is not the trustee’s job.
“In the case of issues, they rarely involve expert trustees in terms of what we see,” Albertson said. “Most of the time, they’re friends. That’s the worst. Your role is to follow the terms of trust.”
