John Donovan's Estate of War, and Irrevocability

Saturday's Wall Street Journal featured a lengthy article about John J. Donovan Sr., described as "a wealthy technology consultant and entrepreneur."  The article details a lot of family intrigue, including allegations of sexual abuse by one of Mr. Donovan's daughters, and a shooting incident that was possibly masterminded by one of Mr. Donovan's sons -- or by Mr. Donovan himself.  The article is here, but available only to subscribers.

Is Mr. Donovan a disturbed, evil man?  Or are his children simply being greedy and taking advantage?  It's impossible to tell from the article, but one aspect of the dispute caught my attention:

In the early 1990s, Mr. Donovan established two trusts in Bermuda, naming his children as beneficiaries.  The trusts were designed, among other things, to shelter his wealth from taxes and to assist with estate planning, according to his lawyers.  Mrs. Donovan says her husband believed the money would be used to start companies and create wealth.  He wanted some of the money going to the kids, but most to charities, she says, although those goals were not incorporated into trust documents. The trusts were structured so that trustees in Bermuda had discretion over them, and Mr. Donovan's permission wasn't required for his kids to tap the money, according to lawyers for both Mr. Donovan and his children.  According to his lawyers, the trusts eventually contained more than $100 million in cash and securities. (Emphasis added)

Mr. Donovan apparently set up an irrevocable trust for his children.  Once set up, such a trust is irrevocable, which means you can't change it or revoke it.  If Mr. Donovan wanted to give "most" of the trust funds to charities, he could have done so before he signed the trust agreement.  He didn't. 

It may seem strange, but the word "irrevocable" tends to be a hard one for clients to grasp.  People who set up irrevocable trusts almost by definition have a lot of money and a fair amount of sophistication, but estate planners like to trade stories about clients who call and ask "how do I amend or revoke my irrevocable trust?"  The answer is, "you don't."