A FIGHT WORTH SWEATIN’ OVER
Richard Simmons, the iconic fitness instructor, passed away in July 2024. Primarily known for his bright spandex clothing and his Sweatin’ to the oldies exercise series, Simmons is now famous for trusting the wrong people with his estate.
Prior to his passing, Richard Simmons established a trust that laid out the beneficiaries of his estate and appointed fiduciaries responsible for carrying out his wishes. Unlike other celebrities, such as Prince, Simmons planned and set forth his wishes for his estimated $20 million estate.
Trusts are a common tool used by estate planning attorneys to lay out a person’s wishes for his or her assets upon his or her demise. A trust document attempts to make distribution of assets simpler than using a Last Will and Testament. Simmons appointed his brother, Leonard Simmons and his live-in housekeeper of 35 years, Teresa Reveles, as his Trustees.
Unfortunately for Richard Simmons, after his passing, the two trustees have been battling in court over the estate. Teresa Reveles alleges that following an emotional open casket viewing of Richard Simmons, she was pressured by Leonard Simmons into signing away her role as co-trustee. After her removal, Reveles argues that Leonard Simmons spent $843,000 from the trust without her approval, including $567,000 in legal fees to remove her as Co-Trustee. In response, Leonard Simmons alleges that Reveles overstayed her welcome in Simmons’ home and removed nearly $1 million worth of jewelry from the home that has not been returned. Both parties allege they are trying to honor Richard Simmons wishes and preserve his legacy.
LESSONS TO AVOID SWEATIN’ THE SMALL STUFF
When Richard Simmons appointed the two people he trusted the most with honoring his wishes after he passed, he never would have imagined that either would be capable of the actions that Leonard Simmons and Teresa Reveles are alleging.
The goal of using Trusts as part of an estate plan allows for the distribution of assets in accordance with a decedent’s wishes as quickly and seamlessly as possible. Although this Richard Simmons’ estate battle takes place in California, there are lessons to be learned in New York.
The most important thing to consider when creating an estate plan is who will be in control of the Trust. In New York, anyone over the age of 18 can be named as a trustee. A trustee has a fiduciary duty to distribute the assets of the trust in accordance with the wishes that have been laid out in the Trust document. Even the most trusted friends and family can become greedy even for estates worth far less than those of Richard Simmons.
Before choosing a trustee, family dynamics should be considered. The most common people to be appointed are the children of the creator (Settlor or Grantor) of the trust. If there are multiple children, Grantor’s feel compelled to appoint all his or her children as Co-Trustees. However, if the children do not get along then appointing all children to act as Co-Trustees may not be in the best interest of the estate. If the Trustees are not going to agree, it may be best to consider a neutral third party, such as a corporate trustee or professional fiduciary. Although there would be additional fees with hiring an outside trustee, it may avoid trustee disagreement that could lead to costly litigation.
Additionally, certain language can be included within the body of the trust to avoid potential issues with trustee disagreements. Limitations of trustee powers can be included to reduce potential issues. The language in trusts could allow each trustee to act independently of the other or force them to agree on all aspects of trust management. Alternatively, an independent, neutral, third-party monitor to serve as a tiebreaker if there are disagreements. If Teresa Reveles was still serving as Co-Trustee with Leonard Simmons, there were likely going to be many disputes over the estate. If there was a neutral party to act as a tiebreaker, the estate would not be at a standstill.
The trust document can also state that if one co-trustee resigns, a new co-trustee will serve with the remaining trustee. This would mitigate the chance of one trustee acting alone. Richard Simmons could have stated that if Teresa Reveles’ resigned as co-trustee, then another trusted friend or family member would replace her and serve with Leonard Simmons. This would prevent Leonard from acting alone.
Further, it is not advisable to sign legal documents without proper legal representation and when emotions are heightened. Although New York courts will take claims of undue influence seriously, it can be avoided by taking the time to process grief and waiting until legal counsel can be obtained. Had Teresa Reveles’ hired her own attorney before signing the resignation, this continuing legal battle may have been avoided.
Lastly, estate planning is different for everyone. Seeking an experienced estate planning attorney could be the difference in your wishes carried out peacefully or fought over in court.
Despite all, the feud of Leonard Simmons and Teresa Reveles will not overshadow Richard Simmons real legacy of spreading joy.
