Following the death of the ‘Prince of Darkness’, and Black Sabbath frontman, Ozzy Osbourne last month, headlines have recently turned their attention to an alleged change to his will, in which Ozzy stipulated that his widow, Sharon, is to receive a dozen black roses a week for the rest of her life (“the rose request”).
While undisputedly a touching romantic gesture, following over forty years of marriage, the rumoured request was also marked as a potential ‘legal headache’, depending on whether the rose request has been phrased as a wish or a legally enforceable obligation. This has highlighted the important role that a trust structure/trustee could play in carrying out the rose request while protecting the interests of Ozzy’s children, if such a trust exists.
The benefit of a trust structure is that its establishment and administration can be tailored to the Settlor’s (the person(s) placing assets into trust) objectives, subject to professional legal and tax advice. If Ozzy was the Settlor of a trust – which remains unknown – there are three primary ways in which his rose request could be actioned within the remit of a trust structure.
1. Letter of Wishes
A Letter of Wishes (“LOW”) is a way for a Settlor to share their wishes about how their trustee should act, both during and after their lifetime. It can be as broad or detailed as the Settlor wants, and can be updated throughout their lifetime to reflect changing wishes and/or circumstances.
The LOW may be used, for example, to express personal preferences regarding the distribution of assets to beneficiaries, how much knowledge beneficiaries should have of the trust fund (eg full/partial knowledge from certain ages), or stipulations that trust funds are to be used for specific purposes (eg school fees for grandchildren).
As a LOW can be updated, if Ozzy had a trust structure in place, he could have included the rose request in his LOW. While such a letter can guide the trustee, they are not obliged to follow the wishes if doing so would conflict with the trustee’s overriding legal duty to act in the best interests of all current and future beneficiaries.
It is, however, very likely that the guidance in the LOW will be followed, other than in exceptional circumstances. For example, if the value of Ozzy’s trust was insufficient to fund a dozen roses each week for the rest of Sharon’s life without depleting assets intended for other beneficiaries, the trustee would be unable to fulfil this request. (However, with an estimated net worth of USD 220 million at the time of his death, it is unlikely the actioning of the rose request would deplete the trust fund to this extent.)
Pro: A LOW can be updated at any time, and as many times as the Settlor wishes, leaving Ozzy free to add the rose request at any stage.
Con: A LOW is not legally enforceable, however it is likely to be followed in most circumstances.
2. Trust deed
Unlike a LOW, trustees are obligated to follow the terms of the trust deed. In this case, had Ozzy made his rose request known upon settling the trust, it could have been entered as a specific clause within the trust deed itself.
According to media reports, however, the rose request was a late addition to Ozzy’s will, rather than being in place when it was established. It is possible, therefore, that it may not have been included in the original trust deed, should one exist.
Whether or not a trust deed can be amended depends on whether a clause to allow variations is included at the outset. Should one be in place, then additions/amendments would have been possible, and trustees would have become bound by any changes.
Pro: Trustees would be legally bound to adhere to the terms within the trust deed, such as the rose request if included.
Con: If the request was not included originally, and the trust deed does not allow for changes, it would not have been possible to include the rose request retrospectively.
3. Purpose Trust
A Purpose Trust is a type of trust structure that is set up to achieve a specific purpose, rather than to benefit named individuals. A purpose trust may be charitable or non-charitable, however not all jurisdictions recognise non-charitable purpose trusts.
In the case of the rose request, if a purpose trust had been established to ringfence funds with the sole purpose to purchase the roses each week for Sharon’s lifetime, the structure would be deemed non-charitable. It would, therefore, need to have been established in a jurisdiction where it would be recognised, such as in Guernsey or the Cayman Islands.
In order for Ozzy’s wish to be carried out with the use of a purpose trust, it would have required to be established for that sole purpose during his lifetime.
Pro: A purpose trust ensures that allocated funds can only be used for a specific purpose.
Con: Non-charitable purpose trusts are not recognised in all jurisdictions,
Succession planning
Aside from his wife, Ozzy is also survived by his five biological children – three from his marriage to Sharon, two with his ex-wife, Thelma Riley, and Thelma’s son who Ozzy allegedly adopted during that marriage. Already, it is not difficult to see where potential challenges and disputes may arise, depending on how Ozzy’s estate is distributed between the children.
Aside from a trust being useful in the potential actioning of the rose request, trust structures are also extremely beneficial when it comes to succession planning, managing family dynamics, and both mitigating and resolving contentious matters.
A trustee is legally obligated to act in the best interests of all current and future beneficiaries, ensuring fair and impartial decision-making. This duty (known as a “fiduciary duty”) can significantly reduce the risk of legal disputes, as trusts do not give rise to the same type of challenges and contests, or lengthy probate matters, that can affect wills.
Conclusion
Everyone, including celebrities, is entitled to privacy. One of the key advantages of appointing a trustee is that it creates a degree of separation between the settlor, the beneficiaries, and the trust assets, as the trustee becomes the legal owner of those assets. As a result, any wealth structures connected to Ozzy, and their potential role in fulfilling his rose request or distributing his estate, may never enter the public domain.
With the right guidance from trusted advisors during his lifetime, Ozzy could have ensured that his personal wishes and plans to provide for his family would be carried out discreetly and effectively, continuing his legacy long after his passing.
Find out more about trusts and succession planning here.
