Jeanie Buss attends the unveiling of a statue of former Lakers coach Pat Riley at Star Plaza in front of Crypto.com Arena on February 22, 2026 in Los Angeles.
Keith Birmingham | Media News Group | Pasadena Star News | Getty Images
A version of this article first appeared in CNBC’s Inside Wealth newsletter by Robert Frank, a weekly guide for high-net-worth investors and consumers. Sign up to receive future editions directly to your inbox.
Jerry Buss built his fortune to keep the Los Angeles Lakers in his family after his death. But lawyers for the trust say some of the safeguards meant to preserve that legacy have ripped apart his children.
Five of Bass’ six adult children want to sell the Bass family’s remaining stake in the basketball team, valued at $12.5 billion in separate recent transactions. Buss’ younger sister, Jeanie Buss, opposes the sale, arguing that the brothers do not have the legal authority to relinquish ownership, which would result in Jeanie Buss losing her position as governor of the Lakers.
ESPN reported this week that Jeanie Buss asked a California court to block the sale and remove her brothers Janie and Joey as co-trustees of a family trust that holds shares in the NBA franchise.
The trust includes a “last man standing” clause, as sister Janie Bass explained to ESPN in 2017. The clause, which transfers the interest to a surviving sibling when the sibling dies rather than their children, provides an incentive to sell while the sibling is still alive, Janie Bass told ESPN at the time.
Stephen Fox, a partner at Buchalter, said it’s common for parents inheriting a business to want to limit the number of stakeholders. However, this type of clause is unusual.
“I rarely include it in estate planning, because it’s unfair to separate children just because one sibling gets cancer and dies suddenly and young,” he says. Fox, like other lawyers who spoke to CNBC, has not seen the terms of the Bass family trust.
Lawyers who spoke to CNBC said that while there are few family-owned businesses like the Lakers, the general circumstances of the Bass family’s predicament are well known. Sean Weisbart, a partner at Blank Rome LLP, said such succession battles are likely to become more common as large wealth transfers occur and baby boomers pass on businesses to their children.
Trust and estate attorneys pointed to three steps to make the transition smoother for family businesses.
Use life insurance to compensate your family
The impulse behind the “last man standing” clause makes sense, Fox said. Without restrictions on the inheritance of stock, a family business could end up with dozens of shareholders. But he said there are ways to avoid having too many cooks in the kitchen while fairly compensating the next generation.
Mr. Fox and Mr. Weisbart each recommended using life insurance to essentially buy stock for their grandchildren. Trusts typically provide insurance coverage for the children of the head or matriarch. When a child dies, the share reverts to the surviving siblings and the grandchildren receive cash from the life insurance proceeds.
If the death benefit isn’t enough to compensate the grandchildren, the trust can provide them with a security note and place a lien on the family business, Fox said. Secured notes are paid over time and can be paid in full if the business is sold.
Even before the business is sold, “there’s enough money for them to live a nice lifestyle,” he says.
This approach can also be used to buy out the children of wealth creators a generation ago who do not want to be involved in the business. But Fox says there is little ability or desire among first-generation entrepreneurs to buy expensive life insurance while they are still relatively young.
Limit decision-making authority
Jerry Buss divided the family’s control over the Lakers evenly among his six children, with each child receiving an equal vote. However, he named Jeanie Buss as his successor as the team’s governor.
The trust requires Jeanie Buss and Joey Buss, as co-trustees, to vote to keep the family’s ownership at least 15% of the team governors, according to a letter written by Buss’ attorney.
Attorneys for Jeanie Buss and her brother did not respond to requests for comment.
Weisbart said it’s common for parents to be torn between wanting to treat their children equally and recognizing that one child is best suited to run a business. But splitting decision-making power may not be in the best interests of children, he added. He proposed allocating voting rights to the one or two children best suited to run the business, splitting economic profits equally.
“Giving voice to people who don’t know how to actually manage a multibillion-dollar business is bad for business,” he said.
Mr. Weisbart and Mr. Fox both recommended placing the family business in a trust and naming only one child as trustee with the ability to make business decisions.
The shares will be pooled into one so-called pot trust, and upon sale, the proceeds will be distributed to the individual sibling trusts, Fox said. He said the company may also add independent co-trustees, such as bankers or advisers to its advisory board.
“It’s much easier for one person to deal with it than to get approval from various children’s funds or the children themselves,” he said. “Brotherhood is a difficult thing. We’re talking about a lot of bad blood.”
Still, Fox said he believes most of his clients prefer a majority-rule approach and that it can deteriorate family ties.
“I always tell my clients that I’m going to destroy the relationship between the children. Once the three of them attack one of them, whoever loses the vote, and the company is sold, they’re going to have bad feelings towards these three brothers for the rest of their lives,” he said.
Mr. Fox and Mr. Weisbart generally agreed, but there is no widespread agreement.
George Taylor, a partner at Brinkley Morgan, said he recommends giving each child an equal voice rather than concentrating power in one sibling. Each brother will be a trustee of a separate trust with an equal share of the business and can act through a majority in the event of a sale.
“Obviously it’s more common for one child to be in charge, but this would be a ‘let’s get along, kumbaya’ approach,” he says.
Rethinking children’s involvement in business
Perhaps the best way to keep the business in the family, Fox said, is to keep family members out of the business.
He said keeping a family business going for generations is a huge challenge. According to Fox, one of the families he works with is running a fourth-generation billion-dollar company. He said the secret to their success is that no one in their family is allowed to work for the company.
He said that after the second generation of the family fought for 10 years in court for control of the company, the third generation amended the shareholder agreement in the 1980s to bar family members from entering the company.
“That doesn’t work for the Lakers, because there’s a lot of expensive things in running the Lakers. But it works for some businesses, and it worked perfectly for this family,” he said. “I’m doing that for multiple clients now.”
There’s no silver bullet to keep children from taking family disputes to court, Fox said. Many trust documents have clauses requiring arbitration or disinheritance for children who choose to litigate, but this is not always enforceable, he said.
“I tell my clients, we’re never going to stop our children and grandchildren from suing each other, because this is not something they earn, it’s something they inherit,” he said. “You built it. You took all the risks and put everything on credit cards when you had nothing. They don’t have that kind of muscle memory.”
