Lessons from Scholastic Owner’s Estate – #1 Have a Plan

Summary of the Situation

Many news sources (such as this and this and this) are reporting the following:

-M. Richard “Dick” Robinson, Jr., longtime chairman, president, CEO, and owner of Scholastic, recently died.

-Scholastic is one of the world’s largest publishers. It is famous for products such as the Harry Potter book series. It is also has deep roots in education products, book clubs, and other business lines. There have been reports that Scholastic is valued at $1.2B and had revenues of $1.5B in 2019.

-Robinson disinherited his children and left his ownership in Scholastic among other things to his “longtime romantic partner” Iole Lucchesse, who is also an employee and officer of Scholastic. There have been reports of this ownership being worth $70M.

– He named Lucchese and one of Scholastic’s general counsel to administer his estate.

Lots of Issues – We Will Just Touch On A Few Legal Issues Everyone Can Learn From

This story obviously has a lot of issues. There are family issues. Corporate governance issues. Succession issues. Ethical and moral issues. I will leave those to others.

But the focus of this blog post and following posts will be a few key “big picture” legal points from the estate and estate planning perspective.

Lesson #1: Have a Plan

Reports are that Robinson had a will and revocable trust. And that the Scholastic shares “left” to Lucchese may not have been left outright. He had thought ahead and developed a plan.

You may not like his plan. Some left behind may not like his plan. Those are fair debates. But as long as someone is of free, sound mind, they can and should develop the estate plan they want.

Action is key. Having a plan is almost always better than not having a plan. (Of course, ideally you will keep your plan up with the big changes of life.)

We tend toward inaction in this area. You could see a scenario where Robinson did not create a plan because he was not sure how to deal with his children, how things were going with Lucchese at any one time, how Scholastic should best carry on, etc. But through all the issues, he developed a plan.

That is a good first lesson for us all.

Especially if you have property or a business you care about. Especially if you have someone outside your family you want to benefit. Especially if you want to keep a business or farm/ranch or other venture together and moving forward after your death.

He could not have done many of the things he did without a plan. That will be the subject of the next post.

But for now, Lesson #1: Have a plan.