By Steven J. Oshins, Esq., AEP (Distinguished)

Anybody who follows sports knows about Shohei Ohtani’s former best friend and interpreter (Ippei Mizuhara) stealing more than $16 million from Ohtani’s bank account to fund his gambling addiction.

Ohtani is the modern-day Babe Ruth on the baseball field, but he clearly has bad taste in friends, at least with respect to Ippei Mizuhara.

Choosing Trustees

When our clients form trusts, they make decisions about current and successor trustees and who can remove and replace trustees.

It is likely that Ohtani selected (or would have selected if he hasn’t yet formed any trusts) his former best friend, Ippei Mizuhara as a successor trustee of his trust(s). Ohtani also has a new wife and two siblings who are likely candidates, but Mizuhara speaks fluid English and would have appeared to be a logical choice as trustee of Ohtani’s United States trust(s), at least prior to his gambling addiction becoming known to Ohtani.

The goal is to select as trustees people who are honest and financially capable. But how would Ohtani have known that his best friend is a gambling addict? [Well, most of us would assume that Ohtani should have noticed so much money missing from his account, but you understand my point here!]

Selecting an Individual as Trustee

One would assume that the client’s brother, sister, child, other close family member or close friend would be a good choice to serve as a trustee.

But the client should not take this decision lightly. Consider the person’s financial competence. Is the person individually wealthy or is he or she a financial disaster? If the person can’t even manage his or her own finances, then this is likely not a good choice as a trustee. And if the person doesn’t have any wealth, then will the person steal from the trust or take an unreasonably large trustee fee?

In other words, the client should consider the financial profile and honesty of the selected trustees and not simply appoint family members or friends who don’t fit the right profile.

Selecting a Corporate Trustee

Another option is to select a corporate trustee. If the corporate trustee is selected to serve as a jurisdictional co-trustee or distribution co-trustee, then the annual fees should be tiny flat fees. This is how we usually use corporate trustees.

But how about using a corporate trustee as the sole trustee where it handles investing, distributions and every other ancillary role? This is expensive, but is often money well spent.

The advantage in selecting a corporate trustee as sole trustee is that the corporate trustee doesn’t steal from the trust or gamble the trust assets away. Although this only rarely happens, if an employee of the corporate trustee embezzles or does something else that is illegal, there are much easier remedies for the beneficiaries since the corporate trustee is licensed and bonded and has insurance.

Summary

This article isn’t intended to push the reader one direction or the other. The intent is to learn from the Shohei Ohtani situation. The guy he thought was his best friend was stealing from him for years. Ohtani likely had him listed as a successor trustee in his trust(s).

Our clients need to put a lot of thought into the choice of trustees and make sure they have someone who is right for the role and if not, then use a corporate trustee and appreciate that the seemingly high corporate trustee fee might be money well spent.

ABOUT THE AUTHOR

Steven J. Oshins, Esq., AEP (Distinguished) is a member of the Law Offices of Oshins & Associates, LLC in Las Vegas, Nevada. He was inducted into the NAEPC Estate Planning Hall of Fame® in 2011. He was named one of the 24 “Elite Estate Planning Attorneys” and the “Top Estate Planning Attorney of 2018” by The Wealth Advisor and one of the Top 100 Attorneys in Worth.  He is listed in The Best Lawyers in America® which also named him Las Vegas Trusts and Estates/Tax Law Lawyer of the Year in 2012, 2015, 2016, 2018, 2020, 2022 and 2024. He was named the “Estate Planning GOAT (Greatest Of All-Time)” by internet poll conducted by the Ultimate Estate Planner in March of 2024.  He can be reached at 702-341-6000, ext. 2 or soshins@oshins.com.  His law firm’s website is www.oshins.com