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When a 48-year-old multimillionaire from Palm Beach, Florida decided to adopt his 42-year-old girlfriend, the decision definitely turned heads. While the choice may be suspect from the perspective of adoption law, the move may sound more strategic from an estate planning perspective. The decision may have been made to protect a trust set aside for his children. Whether the move will prove to be successful is another.
The 48-year-old’s decision to adopt his 42-year-old girlfriend came after criminal charges and civil legal proceedings were filed against the man when he allegedly drove drunk through a stop sign, hit and killed a 23-year-old and fled the scene of the accident. The adoption, according to the man’s attorney, is to protect the 48-year-old’s minor children.
Well before the accident, the 48-year-old formed an irrevocable trust for his two children and the trust grew from $1.5 million to more than several hundred million. In 2009, the man turned the management of the trust over to an outside trust company.
Facing a potential jail sentence and believing the trust company was not doing what it promised to do, the 48-year-old worried that no one would protect the children’s interest in the trust. Therefore, the man sought to add another beneficiary to the trust who could legally protect the interests of the children and the strategy he chose was the adoption of his girlfriend.
According to the 48-year-old, the girlfriend can only receive 5 percent of the trust but she can challenge the decisions of the trust company as a beneficiary. However, the judge in the civil case is not so sure the trust is irrevocable because of the adoption and as a consequence the trust may be included to calculate the damages amount in the civil case.