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Home » Donald Sterling Found to be Mentally Unfit

Donald Sterling Found to be Mentally Unfit

June 30, 2014 by Ellen LaPlante

We remind our clients the importance of putting into place proper powers of attorney should they become incapacitated or otherwise unable to make decisions for themselves. Whether it’s a financial power of attorney or a medical power of attorney (sometimes referred to as a healthcare directive), the Donald Sterling saga is proof of what’s at stake.

In late May, Donald and Shelly Sterling prepared to put together a solution for the massive problems created when a conversation was recorded that included racial slurs. The world reacted, the NBA reacted and now his scorned wife has reacted.

Technically, neither outright own the NBA team. The Sterling Family Trust owns the team, but each spouse has an equal share in it. There are also very detailed procedures for determining either partner’s mental capacity and it was learned last week that Donald Sterling was unable to meet the threshold. This means his wife, who is already dealing with the embarrassment of her near-80 old husband’s fling with a woman more than 50 years his junior, now has full authority over the team; or rather, she does until the sale of the Clippers basketball team is finalized. We’re guessing it’s not a pleasant time in the Sterling household.

Also last week news leaked that Shelly Sterling had entered into an agreement with at least one person, former Microsoft CEO Steve Ballmer, that includes a $2 billion buy of the couple’s beloved Clippers. She’s said to be negotiating some way to remain with the team, though not in the capacity of owner. She did say in a presser, though, “I am delighted that we are selling the team to Steve, who will be a terrific owner . . . We have worked for 33 years to build the Clippers into a premiere NBA franchise.  I am confident that Steve will take the team to new levels of success.”

Meanwhile, her husband vows to fight for his team. But because what’s described as ironclad conditions in the trust’s rules, he may be fighting yet another uphill battle. If, though, he hadn’t been deemed mentally unfit, Shelly Sterling would not be able to do anything without his consent.

So just what is this trust that’s seemingly become Donald Sterling’s worst nightmare? Trusts are used to put into place very specific guidelines on how your assets are handled, whether you’re incapacitated or in the event of your death. Upon your death, and depending on how your trust is set up, the assets are distributed according to your wishes.

One of the first tasks of defining a trust is designating a trustee. This is someone you name and trust to honor your wishes. The Sterling case might also be ideal “poster child” for those stressing the importance of choosing wisely.

In order to enter into a contract, a minimum required mental capacity must exist. The same standards are used by those creating a will and or trust. State laws dictate the specifics but generally, a person is deemed mentally capable if he understands the nature of the testamentary act, understands and can recall the nature of his or her property and can “mirror” the highlights of the document to family members. From the recent media appearances, it seems as though Sterling passes these requirements; after all, he’s considered mentally competent enough to file a lawsuit.

If you take nothing else from this, let it be a reminder of the importance of proper estate planning and routine reviews.

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Ellen LaPlante
Ellen LaPlante
Ellen LaPlante is an attorney whose mission is to provide clients with guidance in Estate Planning, Elder Law, and Medicaid Preparation. She is barred in Vermont and New York. Ellen helps clients put together unique estate plans, including assistance with Trusts, Wills, Powers of Attorney, and Advance Directives. She also works with clients on Medicaid Planning and qualifying for Medicaid assistance.
Ellen LaPlante
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