Estate Planning For Clients With Personality Disorders

Matthew Erskine

29 August 2022

As medical science advances and people are more open about health conditions, various disorders that were once wrapped in euphemisms, or dismissed, are more widely discussed. There is a wide variety of personality disorders which can cause difficulties when it comes to estate planning and wealth transfer. This is a sensitive subject, and not one that often hits these news pages. For that reason, the editorial team are grateful to regular commenter Matthew Erskine, managing partner at law firm Erskine & Erskine, for taking a look at this area. The usual editorial disclaimers apply to views of outside contributors. Email tom.burroughes@wealthbriefing.com

News about the Robert Indiana Estate has been widely reported. Indiana, who died in 2018, was then worth $28 million, and his estate is now worth more than $100 million. However, his estate has been racked by law suits against almost everyone involved, including the lawyer who helped recover $5 million in art and raised the value fourfold.

I happened to meet an artist who lives in Maine who knew Robert Indiana quite well. Of course, I asked what he thought about the situation and his reply was: “He would have loved it, he is laughing in his grave over the chaos he unleashed,” was his answer.

I did not expect this response, but it is not out of the question, especially if the client had borderline personality disorder. In a small, but significant, fraction of estate plans involving artists, founders of businesses and other creative people, those people have personality disorders.

The DSM -5 -TR., published by the American Psychiatric Association, lists seven categories of personality disorders: Avoidant , schizoid , histrionic , narcissistic , borderline , dependent and antisocial . Of these, the most difficult to manage is borderline personality disorder.

People with borderline personality disorder are rigid in their thinking, and often believe that their way of thinking is completely normal, even though in reality it is not. When there is problem, they blame others, especially family members, for the problems their actions have created. The result is that a client with personality disorders provokes interpersonal conflict and will “get under the skin” of their estate planner.

Personality disorders are not as rare as some would think, especially when the client also exhibits addictive behavior, but it is not obvious, especially when the client is highly intelligent and skilled at hiding their behavior. This means that it may take a long time for the personality disorder to surface. Even then, the client will not be sufficiently self-aware that they can admit that they have a problem and are often defensive and shifting blame to others.

For the estate planner, one frustration is that offering advice, or any constructive feedback, fails to modify the client’s behavior and, indeed, can just make the situation worse. Clients with personality disorders rarely know that they are acting badly, rather they feel that they are the ones being treated badly, by friends, family, and others for no good reason. It only takes one person in any situation with personality disorders to end up with a conflict, even if the other person is the most reasonable person in the world.

Personality disorders affect everyone who has any relationship with the client, but this behavior is not unchangeable. If the estate planner understands that their role is not to prevent the client’s bad behavior but to teach the client new, better behavior, things can change.

The goal is not just to save taxes and manage assets; rather, it is to foster a sense of self-awareness in the client and a level of self-control. Without this, even the best estate plan will fail and end up in a chaotic mess, like that of the Robert Indiana Estate. He may be laughing, but I can assure you that no one else is.