The Buss family’s public battle over the Los Angeles Lakers is more than a celebrity feud — it’s a case study in how estate planning can fracture a family, according to trusts and estates attorneys who spoke to CNBC.
Five of Jerry Buss’s six adult children want to sell the family’s remaining stake in the team, valued at $12.5 billion in a recent transaction. Jeanie Buss, the Lakers’ governor, opposes the sale, arguing her siblings lack the legal authority to force it.
The dispute stems from a family trust that includes a “last man standing” clause, which transfers a sibling’s equity upon death to surviving siblings rather than to their children. Janie Buss described the clause to ESPN in 2017, noting it creates an incentive to sell during one’s lifetime.
Steven Fox, a partner at Buchalter, said such clauses are unusual in his practice. “I rarely draft that into estate plans, because just because one sibling has cancer and all of a sudden is going to die young, it’s not fair for their children to be divested,” he said. None of the attorneys who spoke to CNBC had seen the Buss trust’s actual terms.
Insurance as a solution
Fox and Sean Weissbart, a partner at Blank Rome LLP, both recommend using life insurance to buy out grandchildren’s equity. The trust would take out policies on the children of the family’s patriarch or matriarch. When a child dies, their shares revert to surviving siblings, while grandchildren receive cash from the life insurance payout.
If the death benefit isn’t enough, Fox said the trust can provide a secured note with a lien on the family business, paid out over time and in full upon a sale. “There’s plenty of money for them to have a great lifestyle,” he said.
This approach can also be used earlier to buy out children who don’t want to run the business, though first-generation entrepreneurs often can’t or won’t pay for expensive life insurance policies while young, Fox noted.
Decision-making power
Jerry Buss divided the Lakers’ controlling stake evenly among his six children, each with an equal vote, but designated Jeanie as governor. According to a letter from Jeanie’s lawyer, the trust requires two of her siblings and co-trustees to vote to keep her ownership above the 15% minimum for team governors.
Weissbart said parents often struggle between treating children equally and acknowledging one is best suited to run the business. He suggests allocating voting rights to one or two capable children while dividing economic interest equally. “Giving people the say over a multibillion-dollar business who don’t know how to actually manage it is detrimental to the business,” he said.
Both Weissbart and Fox recommend placing the family business in a trust with a single child as trustee, using a “pot trust” that pools shares and distributes sale proceeds to individual trusts. Fox sometimes adds an independent co-trustee, like a bank advisor, to streamline decisions. “It’s so much easier just to have one person dealing with it than to have to gain approvals from various children’s trusts or children themselves,” he said. “Siblings are difficult. We’re talking about a lot of bad blood.”
Still, Fox said most clients prefer majority rule, which he warns can breed resentment. “Once three of them gang up on one of them, the one that gets outvoted — and the business then gets sold — is going to harbor bad feelings the rest of their life,” he said.
An alternative: equal say
Not all attorneys agree with concentrating power. George Taylor, a partner at Brinkley Morgan, recommends giving each child equal say, with each serving as trustee of an individual trust and acting by majority on sales. He called it the “let’s get along, Kumbaya” approach.
Fox suggests another tactic: keep family members out of management entirely. He cited a client with a fourth-generation billion-dollar company where no family member is allowed to work. After the second generation spent 10 years fighting in court, the third generation amended the shareholder agreement in the 1980s to bar family involvement. “That doesn’t work for the Lakers, because there’s a lot of swag that goes along with running the Lakers,” Fox said. “But it works for some businesses.”
Fox acknowledged no plan can prevent litigation entirely. “I tell my clients you’re never going to stop your kids and grandkids from suing each other, because they didn’t earn this; it’s inherited,” he said. “You built it up. You took all the risk when you had nothing and were putting everything on your credit card. They don’t have that muscle memory.”
The Buss family’s dispute, and the lawyers’ advice, may resonate with the growing number of families navigating the great wealth transfer, where baby boomers are passing businesses to heirs.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/27/buss-family-lakers-trust-dispute.html
This article is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Do your own research and consult a licensed professional before making financial decisions.
