Family Feud: The Battle for the Los Angeles Lakers and the Perils of Estate Planning

The legacy of the late Jerry Buss, the visionary owner who transformed the Los Angeles Lakers into a global sports dynasty, is currently at the center of a high-stakes legal battle. While Buss carefully structured his estate to ensure the franchise remained in family hands, the very mechanisms designed to preserve his empire have become the catalyst for a bitter rift among his children.

The Conflict Over Control

The current dispute centers on the family’s remaining stake in the franchise—a share now valued at a staggering $12.5 billion. Five of Buss’s six adult children are reportedly pushing to sell that interest. Jeanie Buss, the team’s longtime governor and the face of the franchise, is fiercely opposing the move.

Court filings reveal that Jeanie has petitioned a California judge to block the sale, arguing that her siblings lack the legal standing to divest the family’s stake. Furthermore, she is seeking the removal of her siblings, Janie and Joey, as co-trustees of the family trust, citing their roles in the attempted sale.

The “Last Man Standing” Clause

At the heart of the tension is a controversial provision known as a “last man standing” clause. As described by Janie Buss in 2017, the clause dictates that if a sibling dies, their equity in the team does not pass to their own children, but is instead absorbed by their surviving siblings.

Estate attorneys view this as an unusual and potentially volatile instrument. Steven Fox, a partner at the law firm Buchalter, noted that while parents often wish to limit stakeholders, this specific clause creates perverse incentives. “I rarely draft that into estate plans,” Fox said. “Just because one sibling has cancer and is going to die young, it’s not fair for their children to be divested.”

Lessons from the Lakers’ Litigation

The Buss family’s predicament serves as a cautionary tale for high-net-worth families navigating the “great wealth transfer.” Legal experts suggest that the Buss family Lakers trust dispute highlights three critical strategies for avoiding similar internecine conflicts:

1. Using Life Insurance as an Equitable Tool
To prevent the “too many cooks” problem without unfairly penalizing heirs, attorneys suggest using life insurance policies. By taking out policies on the children of the patriarch, trusts can ensure that when a sibling passes, their children receive a cash payout, allowing the equity to be bought out by the remaining siblings. This provides a clear, liquid inheritance for grandchildren while keeping the business ownership streamlined.

2. Centralizing Decision-Making Power
Experts suggest that dividing voting rights equally among children—as Jerry Buss did—can be a recipe for disaster. Sean Weissbart, a partner at Blank Rome LLP, argues that parents should be realistic about their children’s management capabilities. “Giving people the say over a multibillion-dollar business who don’t know how to actually manage it is detrimental to the business,” Weissbart noted. He recommends placing the business in a “pot trust” and designating a single, capable trustee to handle operations, rather than forcing siblings to reach a consensus.

3. Removing Family from Management
Perhaps the most drastic but effective strategy is to separate family ownership from day-to-day operations. Some ultra-high-net-worth families have amended shareholder agreements to prohibit family members from holding executive roles within the company. While this may not be feasible for a brand as personality-driven as the Lakers, it has proven successful for other multi-generational conglomerates in preventing personal grievances from bleeding into business decisions.

The Inheritance Reality

Ultimately, legal experts acknowledge that no estate plan is immune to conflict when large fortunes are involved. “I tell my clients you’re never going to stop your kids and grandkids from suing each other, because they didn’t earn this,” Fox said. “You built it up. You took all the risk… They don’t have that muscle memory.”

As the court weighs the fate of the Lakers, the case stands as a stark reminder that in the world of generational wealth, a carefully crafted legal document is often no match for the complexities of sibling dynamics.