Gettys Resolve Dispute Over Trust : Agreement Reached on Provision for Unborn Heirs
The Getty family, one of America’s wealthiest, on Thursday resolved its feud over a $4-billion trust after a Los Angeles Superior Court judge ordered the lone remaining dissenter to agree to a plan that divides the mammoth bequest into four smaller trusts of $750 million each and sets aside $1 billion for taxes.
Settlement of the 19-month-old dispute came after Getty family lawyers agreed to add a single sentence to the 89-page settlement accord to assuage concerns expressed by the attorney for 17-year-old Tara Getty and future Getty heirs. The lawyer, Seth Hufstedler, had argued that the proposal did not adequately protect the rights of unborn heirs to the J. Paul Getty fortune.
Hufstedler had urged Judge Richard P. Byrne to amend the settlement plan--which had been endorsed by all 26 living Getty heirs, including Tara--to “give at least equal weight to the growth” of both the principal and the income earned by the trust, thus ensuring that future Getty heirs share in the oil billionaire’s estate.
Because of Hufstedler’s objections, a provision was added to the settlement requiring the trust assets to be invested not only for the benefit of current beneficiaries but also with the interests of future heirs in mind.
Hufstedler, a wiry downtown lawyer who rose to prominence in 1979 as special counsel for the state Judicial Performance Commission, also balked at another part of the settlement plan regarding attorneys’ fees. But by Thursday, Judge Byrne had had enough. He ordered Hufstedler to sign the agreement.
“You have voluntarily consented to all aspects of the agreement except for that one provision (on attorneys’ fees),” Judge Byrne said. “With respect to that provision, the court hereby directs you to sign the agreement.”
The proposed settlement, which awaits an order from Judge Byrne before it becomes final, was aided by a new California law that gives state courts the power to divide personal trusts into two or more parts at the request of the trustees or with the consent of all of the beneficiaries of those trusts.
The Getty family’s two dozen lawyers relied on that law to hammer out a complex settlement that calls for the $4-billion trust--established in 1934 by J. Paul Getty and his mother, Sarah C. Getty--to be divided into four smaller trusts totaling about $750 million each. The remaining $1 billion has been earmarked for state and federal taxes.
Two of the three sons of J. Paul Getty--Gordon Getty, 51, and Eugene Paul Getty Jr., 52--would each share in separate trusts of $750 million, while another $750-million trust would be shared by the three daughters of J. Paul Getty’s other son, George Franklin Getty II, who died in 1973.
The fourth $750-million trust would be further subdivided into three parts. J. Paul Getty’s fourth son, the disfavored Jean Ronald Getty, would get only $3,000 in yearly income while the remaining income from the trust would be distributed to Gordon and Eugene Paul Getty and their three nieces.
The settlement, which has been placed under court seal to protect family members, attempts to resolve conflicts between two generations of Getty heirs who stand to benefit from the trust in different ways.
The three sons of J. Paul Getty and the oil billionaire’s three granddaughters are entitled to share in the income of the trust each year--an amount that reached a hefty $330 million in 1984; their descendants would share in the principal of the trust after the sons have died.
Hufstedler, who was the first to file suit in November, 1983, after he was appointed by the court as guardian of Tara, had defended his opposition to a settlement agreement at an earlier hearing, saying: “I have a duty to be fair to future heirs.” But by Thursday his resolve had softened.
“Great efforts have been made toward family peace,” Hufstedler told the court on Thursday. “The alternative is years and years of bitter family division.”
HOW THE GETTY FAMILY FORTUNE WILL BE DIVIDED Pending court approval of the settlement agreement, some 26 Getty family members will eventually share in four trusts. About $1 billion will be set aside for taxes. (Not listed are seven great-grandchildren.)
Sarah C. Getty Trust $4 billion Established in 1934 by J. Paul Getty and his mother, Sarah.
Trust for Heirs of George Franklin Getty (1924-1970) $750 million * Anne Catherine Getty Earhart (1952--) * Claire Eugenia Getty Perry (1954--) * Caroline Marie Getty (1957--)
Trust for Jean Ronald Getty (1929--) $750 million Under terms of his father’s will, Jean Ronald is to receive only $3,000 in annual income. Remainder of income from this trust goes to other sons and their heirs.
Trust for Eugene Paul Getty Jr. (1932--) and Heirs $750 million * Jean Paul Getty III (1956--) * Aileen Getty Wilding (1957--) * Mark Getty (1960--) * Ariadne Getty (1962--) * Tara Getty (1968--)
Trust for Gordon P. Getty (1933--) and Heirs $750 million * Gordon P. Getty Jr. (1965-) * Andrew R. Getty (1967--) * John G. Getty (1968--) * William P. Getty (1970--)
