Healthy foods, charitable donations, non-profit foundations, a tribute to a beloved actor — these are all good things. So why is Paul Newman’s estate causing such a hullabaloo, some eight years after he passed away?
Newman’s Own, of course, is the food products company that the legendary actor launched in the early 1980s. Today, it is known for producing organic foods and salad dressings, not to mention the fact that it gives hundreds of millions of dollars to charities every year.
When Newman died in 2008, his daughters assumed they’d take their seats on the board at Newman’s Own, but a wrinkle in the actor’s estate plan led to surprising results. Here’s the timeline:
- 1980 — Paul Newman develops the idea for Newman’s Own while Christmas caroling
- 1982 — Paul and author A.E. Hotchner found Newman’s Own
- 1993 — Paul’s daughter, Nell, launches the Newman’s Own Organics division
- 1999 — Paul has his attorney draft a letter of intention, aiming to give his children control of the company’s charitable distributions
- 2006 — Paul meets with lawyers, accountants, and family members to echo the intentions expressed in his letter of ‘99
- 2007 — Paul repeats those intentions in a video interview
- 2008 — Paul is hospitalized and re-writes his will
- Two months before his death — Paul hands considerable control in Newman’s Own over to two of his associates (and not to his daughters)
Today, there are questions about why — and under what circumstances — Paul Newman made a sudden about-face in the final months of his life. For now, though, his family enjoys far less control in the company than they ever imagined.
It goes to show the importance of clarity in drafting and of clear communication between attorneys and among family members. Too often, outcomes are taken for granted in estate planning, with relatives assuming they already understand one another’s intentions.
The takeaway? Any change in an estate plan needs to be handled delicately. Review your documents often, update them as needed, and communicate those updates to the people who will be affected by them. Doing so can save your family from terrible hardship and surprise in the future.