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Estate Litigation Brews over Media Mogul Sumner Redstone’s Mental Competence

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Has media mogul Sumner Redstone become mentally incapacitated? This was the question put before the Los Angeles Probate courts this past week, when former girlfriend Manuela Herzer filed a lawsuit claiming he did not have the mental capacity to remove her as agent on his Power of Attorney.  Mr. Redstone is now 92 and owns majority shares in both media giant Viacom as well as CBS Corp. Viacom owns subsidiaries Paramount Pictures, BET Network, MTV, Comedy Central, and nearly 170 others in nearly 160 countries around the world. With a majority share in both media conglomerates, Sumner ranks among the richest men in the world, with an estimated $5 billion + net worth. 

Now, before we dig into the nitty gritty of just what’s going on in this situation, as a Trust and Estate Attorney I feel obliged to make a quick legal clarification. In California, Financial Power of Attorney grants the agent (or person given power of attorney) power to act on behalf of the principle (here, Redstone). Similarly, in California, the Advance Healthcare Directive grants the agent power to make medical, healthcare, and day to day decisions regarding well being on behalf of another individual. In other states, however, the Advance Healthcare Directive is also known as the Medical Power of Attorney. In this case, it appears Herzer was the agent for his medical power of attorney only, as no articles make mention of her controlling his finances. 

However, if Ms. Herzer was agent of  Redstone’s financial power of attorney, she would have the ability to sign financial documents, make withdrawals from bank accounts, sign contracts, and a host of other privileges should Mr. Redstone be deemed incompetent. As his agent for medical power of attorney (or Advance Healthcare Directive), she would be entitled to make all medical and healthcare decisions on his behalf. Regardless of which one Herzer had, my question is how did a much younger former girlfriend get herself into the position of holding power of attorney for one of the world’s most powerful media titans? While it’s unclear how exactly Ms. Herzer (51) ingratiated herself with the much older billionaire, an expose by Vanity Fair shed some light on some of what was going on behind the Redstone mansion doors. It looks like Hugh Hefner may not be the only old guy in Hollywood with more than one girl in his bed… but we’ll let you read about that in the gossip mags. Here’s what’s been broiling in the probate courts this past month.

On October 12, Vanity Fair reported that Manuela Herzer returned to Redstone’s residence to find the house filled with lawyers and was told Sumner no longer wanted her there. According to reports, her house was just minutes from his mansion, and Herzer was frequently there managing his staff and attending to his healthcare needs. 

According to WSJ, around the time she was told to leave his home, Mr. Redstone also signed documents removing Ms. Herzer as agent for his Power of Attorney (or Healthcare Directive). Instead, Mr. Redstone elected to have Viacom CEO Phillip Dauman act as his agent. In regards to the change, Ms. Herzer stated in a petition to the court:

“I am convinced that if Sumner indeed signed anything himself that day, he lacked the mental capacity to understand what he was signing, much less the legal and practical significance of the documents he signed.” 

In her petition (drafted by top LA trust and estate attorneys), Manuela asked the court to determine that Sumner Redstone did not have the mental capacity to remove her as agent or remove her in her role as his caretaker and healthcare manager. In addition, she asked the court to find that Sumner Redstone currently lacks the ability to make his own medical decisions. At first glance, these two findings would essentially trigger her role as agent of his care. Redstone’s attorneys, however, argue that Herzer brought the petition not for any immediate benefit, but in order to gather evidence which she would later use in a post death trust contest. The theory is that if she can prove Redstone lacks mental capacity now, it would strengthen her position in asserting he was also incompetent when he signed his trust documents. This implies that Ms. Herzer either knows or suspects that she is not a significant beneficiary of Mr. Redstone. The theory would also explain why Ms. Herzer did not file for a conservatorship over Sumner Redstone. Conservatorship proceedings (at least in Contra Costa and Alameda County) are always conducted with the conservatee’s (incapacitated individual) best interest in mind, and the conservator’s interests second. The tactics used by Ms. Herzer’s attorneys have a better chance at making her more money, and her trust lawyers as well. Several trust litigation firms in Walnut Creek use aggressive tactics such as this on a regular basis on the grounds that more fighting may lead to substantially more money.  

This Monday, a Los Angeles probate judge ruled that he believed Sumner Redstone to be in charge of his facilities and is capable of deciding who he wants to be his agent. Ms. Herzer’s attorneys had requested the court proceeding to be expedited to next week, citing risk to the health of Mr. Redstone. Their requests included examinations of and depositions of Mr. Redstone, members of his home staff, and one of his attorneys. While the judge denied the request for an expedited case, he did not throw out Ms. Herzer’s case as Mr. Redstone’s attorneys had hoped for. Instead, he continued the matter until a hearing on Redstone’s motion to dismiss the petition could be heard. 

Whether or not Ms. Herzer filed a lawsuit for her own “potential financial agenda,” as Redstone’s attorneys assert, or she did it out of genuine concern for the well being of Sumner Redstone, may perhaps never be known. As a Trust attorney in Walnut Creek who frequently deals with contentious estate litigation matters, I have found that things are generally not so black and white. I can only say that I hope Mr. Redstone is able to live out the rest of his days peacefully, and can be kept somewhat sheltered from the court battle which will no doubt ensue.

Determining if an individual has the mental capacity to execute documents such as a will, trust, power of attorney, or healthcare directive is often a more difficult task than anticipated. As an Elder Law attorney in the SF East Bay, I always warn clients to err on the side of caution to avoid potential undue influence lawsuits. 

For questions about undue influence, valid wills, trusts, powers of attorney, or other elder law issues, call my Elder Law Firm in downtown Walnut Creek for a consultation: 925-322-1795

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