Families Of Deceased Celebrities Have Wealth Wars Too

Rich celebrities---who one might assume would have sophisticated, ironclad estate planning documents in place to avoid estate disputes and facilitate post-death transfers of assets to their desired beneficiaries---are not immune from wealth wars.  Rather, even the families of famous musicians, actors, etc. occasionally engage in years-long battles over their deceased loved one’s money and property.  For example, below are 8 randomly-selected celebrity inheritance disputes:

1.  Prince:  The purple-loving musician died without a will in 2016, leaving 6 half-siblings but no spouse or living children.  A 6-year long legal battle, apparently with thousands of Court filings, resulted among his heirs (ultimately settling) over his $156 million estate because they could not agree how to manage the estate moving forward.

2.  Stan Lee:  After the Marvel Comic Books co-creator's death in 2018, his daughter J.C. Lee and other parties engaged in a 4-year battle over his estate, worth around $50 million.  She was accused of intellectual property theft and elder abuse, while Stan’s former business partners were accused of exploiting him for financial gain.

3.  Aretha Franklin:  After the legendary singer's death in 2018, she left an estate estimated to be worth about $80 million.  In the months that followed her death, numerous wills were discovered---some of them handwritten, some of them found under couch cushions, and all of them contradictory in parts---which resulted in confusion and years of litigation over who her intended beneficiaries really were. 

4.  James Brown:  The iconic singer's estate was involved in a 15-year long legal battle after his death in 2006.  He left a will naming numerous beneficiaries---including children, grandchildren, and charities---but various other claims were made by other alleged children and relatives leading to multiple lawsuits that were ultimately resolved in 2021.

5.  Whitney Houston:  After the acclaimed singer's death in 2012, her daughter, Bobbi Kristina Brown, inherited her estate and was her sole beneficiary according to a 1993 will.  However, Bobbi Kristina died in 2015, just 3 years after Whitney, resulting in a legal dispute among multiple people scrambling over who would inherit the assets:  Bobbi Kristina’s father (bad boy Bobby Brown); her maternal grandmother, Cissy Houston; Whitney’s brothers; and even Bobbi Kristina’s boyfriend at the time, Nick Gordon (later found civilly liable for her death in 2016, and in turn he later died of a drug overdose in 2020).

6.  Michael Jackson:  After the singer's untimely death in 2009, his estate became involved in multiple legal battles, including disputes between his family and the estate's executors over control of his assets (estimated to be hundreds of millions of dollars at a minimum) and a lawsuit filed by Quincy Jones for unpaid producer royalties.  His mother and 3 children were the beneficiaries of his estate, and the primary dispute was one in which his will was alleged to be fraudulent and not properly executed, claims ultimately rejected by the Courts.

7.  Robin Williams:  Following the actor's 2014 death from suicide, his widowed 3rd wife and his children from previous marriages were involved in a legal dispute over the interpretation of his estate planning documents.  The case ultimately settled, with both sides accusing the other of “greed,” and is a Hollywood example of one of the most common scenarios in estate and trust litigation, i.e., the children of the deceased locking horns with a subsequent spouse of the deceased. 

8.  Philip Seymour Hoffman:  After the actor's death in 2014 from a drug overdose, his estate was embroiled in legal battles involving will contests and disputes over the rights of his estate.  While understandably not wanting to leave behind “trust fund kids” without incentive to work, he left a will naming his girlfriend as sole beneficiary of his estate, trusting that she would purportedly provide for his children.  He also failed to have sound estate planning in place, subjecting his assets to millions of dollars of otherwise avoidable taxes.

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House, Swann & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

"Are Millions Missing? Some Relatives Want To Know. Others Don't."

            One of the premises of this Blog is that estate and trust disputes will become more common over the coming years and decades, in large part due to the graying of America given the large baby boomer generation actively retiring, the fact that people are living longer and many of them will develop dementia and Alzheimer’s Disease, and because we are in the midst of the largest inter-generational transfer of wealth in human history.  Accordingly, there will be increasingly more attention given to this subject. 

            A recent example of that is a New York Times article entitled “Are Millions Missing?  Some Relatives Want To Know.  Others Don’t” that features our law firm’s clients, Virginia and Curt Noel, and their years-long struggle to discover the truth surrounding their family’s wealth. We were privileged to represent Virginia and Curt in multiple legal proceedings both in federal court and state court, as they sought to unravel the mysterious and unfortunate events that surrounded the whereabouts of the assets left by Virginia’s mother, Rose McKee, and father, Dr. Bobby McKee, a prominent Jonesboro, Arkansas ophthalmologist and entrepreneur.  

            As the article states, between our law firm, our co-counsel, Asa Hutchinson, III, other law firms across the country, and a myriad of other financial experts and other consultants, the Noels have spent over a million dollars pursuing their investigation and litigation through the courts.  Most people are not blessed with the Noels’ resources to pursue such matters for the years which it has taken, but for them it was never about the money but was rather about the truth.  Their quest continues and can be followed at www.misplacedtrust.com. 

            I encourage you to read the New York Times article and then consider whether or not you might have a similar experience with regard to your wealth or your family.  If you are the potential beneficiary of a will or trust it pays to be diligent about your rights and be attentive to other beneficiaries and fiduciaries who may be less than diligent, attentive, or transparent.  If you are an executor or a trustee, this story is a good reminder that you must be attentive to your fiduciary obligations, mindful of the estate planning documents, and cognizant of your duties and obligations under the pertinent law. 

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House, Downing & Lueken, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Presentation At The 2016 Arkansas Bar Association Annual Meeting

Today one of my law partners, Pat James, and I will be privileged to make a presentation at the Arkansas Bar Association Annual Meeting in Hot Springs, Arkansas, where over 1,200 lawyers and judges congregate every June for 4 days of continuing education seminars,  meetings, and socializing.   The title of our presentation is---not surprisingly given that you are reading this blog---"WEALTH WARS:   Arkansas  Estate, Trust, Probate And Inheritance Litigation."

The hour-long presentation is designed to be a broad overview, for the general practitioner, of numerous topics arising in this area of law.   For an A to Z listing of the topics to be discussed, inclusive of some written materials containing a checklist of common claims and causes of action; a checklist of common defenses; an exemplary case theme (the “fraud triangle”); a lengthy list of Arkansas statutes frequently arising in litigated estate and trust matters; and citations to a few helpful general and Arkansas-specific secondary materials,  please click on the following link:    Written Materials For June 2016 CLE Presentation 

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Demographic Trends Suggest More Estate, Trust And Probate Litigation In The Decades To Come

I have long been interested in demographic trends, emerging technologies, cultural changes, and shifting societal patterns.  For example, 20+ years ago when I was in college I read Alvin and Heidi Toffler's  "War And Anti-War," which while a bit dated now predicts how future wars will be fought (but with an eye toward peace and avoiding such conflicts).   Similarly, about 5 years ago I read George Friedman's "The Next 100 Years:  A Forecast For The 21st Century,"  which was an eye-opening look at how our  nation and world may likely look in the years and decades to come.  I highly recommend either book for some fascinating reading, and it will be interesting to someday see how accurate or inaccurate their predictions were.

 Then,  a couple weeks ago I came across a very interesting article by a Georgia attorney named John J. Scroggin, in Wealth Strategies Journal,  which focused in particular upon 30 positive and negative trends that will impact estate planning over the next several decades:  "Where Is The Estate Planning Profession Going?"    While I focus much of my law practice upon estate, trust and probate litigation---as opposed to estate planning and drafting of wills, trusts, and the like---the article still addressed my areas of interest and I thought I would share a couple excerpts here.  Better yet, lawyers and laypersons   should take the time to read the entire article  which not only encompasses great analysis but also contains good references to other articles, checklists, outlines, etc.

               For example, with regard to estate and trust litigation in general Mr. Scroggin opines that:

               "(9) Estate and Trust Litigation. As a result of the combination of poorly drafted  documents, dysfunctional families, incompetent fiduciaries, greedy heirs, inadequate  planning and poorly prepared fiduciaries, estate litigation has been booming in the last  few decades. This growth will continue.

               One consequence of the increased litigation will be an increased effort by both individual and institutional fiduciaries to make sure estate and trust instruments provide for strong  fiduciary protection. We should anticipate more protective provisions in fiduciary  instruments, including broader indemnity provisions for fiduciaries, modifications of the  normal fiduciary standards and investment polices, broader use of no contest clauses,  limited liability for delegated powers and limits (or increases) on disclosures to  beneficiaries. These changes will increase the need to create counter-balancing powers  designed to protect beneficiaries (e.g., a wider use of Trust Protectors and fiduciary  removal powers). As a result, there will be longer discussions with clients and the  complexity of the documents will increase."

               Related to the foregoing are Mr. Scroggin's thoughts on avoiding estate and trust litigation altogether, through conflict minimization:

               "(10) Conflict Minimization. The corollary to estate and trust litigation is planning  designed to mitigate the potential sources of intra-family estate conflicts. According to  the Wealth Counsel 6th Annual Industry Trends Survey, the top motivation for doing  estate planning was to avoid the chaos and conflict among the client’s heirs. Many clients  have an abiding desire to establish structures which minimize the potential points of  conflict and provide a mechanism to resolve future family conflicts. Clients want to  dispose of assets in a manner designed to minimize family conflict - leaving a legacy of  relationships rather than a legacy of conflict. This is a growing part of the discussion with  clients and a part of their planning documents. Solutions include using personal property  disposition lists, looking at real or perceived conflicts of interest when appointing  fiduciaries, or passing the family business only to the children running the business. As  noted above, attorneys will need to spend more time talking with clients about providing  greater protections to fiduciaries and creating counterbalancing protections for heirs.

 Many individual fiduciaries agree to serve without fully understanding the potential  liabilities and conflict they may be inserting themselves into. Should attorneys provide written materials (perhaps signed by the client and the fiduciary) detailing the  responsibility of the fiduciary, the risk of conflict and the means by which the drafter has  tried to minimize those exposures? Should attorneys more thoroughly advise their clients  on the necessary skill   sets needed by their fiduciaries - instead of just accepting the  client's choices at face value?"

  In sum, as I have written before on this blog, American society is rapidly changing.  The Baby Boomers have begun retiring over the last many years and will continue to do so over the next 2-3 decades.  Large sums of wealth have been acquired and will be transferred to younger generations.  People are living longer, and the aging population will be less competent due to Alzheimer's Disease and other forms of dementia which will lead to conflicts over whether a deceased person had the requisite capacity to execute a will or trust.  These and other trends strongly support the notion that there will be increasingly more estate, trust and probate litigation in the decades to come.

               Matt House can be contacted by telephone at 501-372-6555, by e-mail at  mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Amendments To Wills And Trusts Can Result In As Many Or More Disputes As The Original Documents Themselves

Often estate and trust litigation revolves not around the will or trust itself, but rather changes to those instruments (a codicil to the will, an amendment to the trust, etc.).  That was the case in the recent appeal of Harbur v. O’Neal, et al., 2014 Ark. App. 119 (February 19, 2014).   The matter involved numerous issues, but one of them entailed the question of whether or not certain amendments to a trust were valid.  

Frequently the settlor of a trust has a legitimate reason for wanting to amend their trust.  Perhaps they want to change a successor trustee, remove or add a beneficiary, alter the trust’s assets, or there could be any number of other reasons why the trust may need to be amended.  However, it is important that the settlor of the trust amend their instrument with the competence to do so, of their own free will and volition, without being coerced, and without undue influence by someone else.  That was one of the disputes in the Harbur case.

Specifically, like so many cases that I handle and so many estate and trust litigation matters in general, this lawsuit involved battling siblings and children of the trust settlor.  One of the litigants, Jeanne, was found to have performed every step of obtaining information regarding a first trust amendment, she actually prepared the amendment, she produced and finalized the document, and she also benefitted from the amendment. 

The trial court held that because these facts supported a conclusion that Jeanne procured the trust amendment, a rebuttable presumption of undue influence arose and the burden of proof shifted to Jeanne to prove beyond a reasonable doubt that her mother had both the mental capacity and freedom of will at the time she executed the trust amendment.

Likewise, Jeanne also testified that she prepared a second trust amendment for her mother’s signature as well.  This amendment made Jeanne the sole beneficiary of the trust upon her mother’s death, and made Jeanne’s children sole beneficiaries of the trust if Jeanne did not survive her mother. 

Similar to the reasons stated for finding procurement with regard to the first trust amendment, the trial court also found that Jeanne had procured the second amendment.  The appellate court affirmed these rulings holding that there was overwhelming evidence of procurement, including but not limited to Jeanne’s own testimony.

A number of lessons can be learned from this case.  For example, this appeal demonstrates that the settlor’s intent should control and they should be able to dispose of their property as they wish, without coercion or undue influence from anyone.  If and when they do want to amend the trust, they either need to do it by themselves or preferably with the assistance of a trusted attorney who is acting solely in their interest and whom is independent from the beneficiaries. 

Further, a beneficiary should consider not preparing the trust amendment, even at the request of a settlor, because that beneficiary may be risking the validity of the very amendment from which they would benefit if someone attempts to set aside the trust amendment based upon procurement, undue influence, coercion, and the like.

In sum, amendments to wills and trusts are fertile ground for estate and trust litigation because frequently the changes are executed many years after the original documents are signed.  Amendments can, in a very short and sweeping document, fundamentally change the intent of the original estate planning documents and the assets disposed of by those documents.  Such amendments are sometimes signed in haste or at a point in the deceased person’s life when they may not fully understand or appreciate the nature of what they are doing (assuming the settlor signed the amendment(s) at all). 

With the stroke of a pen, millions of dollars and valuable real or personal property can be inherited by or administered by persons other than those initially envisioned by the original instruments.  For these reasons, as much or even more care should go into the preparation and execution of the amendments as go into the original versions.  Similarly, as much or more scrutiny should be paid to the preparation and execution of these amendments as was paid to the initial documents.

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Managing Someone Else's Money

 Estate, trust, power of attorney and probate disputes often develop due to disagreements over the manner in which someone managed another person's money. For example, the beneficiaries of a will might disagree with the executor's claim for fees related to administration of an estate.  Co-trustees might differ as to the best investments for maximizing the income and assets of a trust.  Two children might question the propriety of their third sibling's withdrawals of money from their mother's bank account, pursuant to a financial power of attorney that the mother apparently executed at some point in the past.

 To provide guidance in these situations, the Consumer Financial Protection Bureau has recently released 4 booklets entitled "Managing Someone Else's Money" which are intended for such persons as trustees, agents under powers of attorney, court-appointed guardians, and government fiduciaries.  Not only do they assist those who are honestly and legitimately attempting to assist in the management of money or property for a loved one, they also provide information on warning signs and things to look for when someone else is doing the managing of that person's finances.

 Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Apparent End To The Huguette Clark $300 Million Estate Battle

In a middle-of-the-night deal during jury selection of a New York trial, it appears that a settlement has been reached in the infamous Huguette Clark estate dispute.  You can read all about it at this link.  I had written about this over 3 years ago back in August 2010 at this link.  This litigation serves as a very interesting case study in undue influence allegations and other issues commonly associated with estate and trust disputes.  A more comprehensive overview of the stories, videos, and other coverage of this saga can be found at this link.          

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Arkansas Court Of Appeals Affirms Agreement To Split Joint Accounts Despite Beneficiary Designations

 There is often confusion regarding what property falls within an estate, or trust, and what property falls outside of either.  For example, commonly bank accounts, IRA’s, etc., are titled in such a way that upon one person’s death, the remaining monies are left to the other person or person(s) identified on the account paperwork such that this property passes outside the estate or trust.  It can often be a difficult task to demonstrate that this money should be divided in a different manner.

 However, the Arkansas Court of Appeals recently affirmed a trial court’s ruling that this was what was supposed to occur, in the case of Richardson v. Brown, 2012 Ark. App. 535 (September 26, 2012) stemming from Faulkner County Circuit Court.  This was actually a case that I handled on behalf of a client, and the Judge ruled in his favor.  The ruling was left wholly intact by the appellate court.

Without going into too much detail, the parties' mother passed away leaving three children as her heirs.  Certain property passed to the children pursuant to a will, but the mother had other property (a car, bank accounts, IRA, etc.) that were titled in various ways as between her and her individual children.  Our client argued that despite the titling on the various property, the three children had in fact an oral agreement, as demonstrated by the later actions and conduct of the children, to split all of the properties evenly.  He had received the “short end of the stick” and, basically, believed that his sisters had intentionally deprived him of his equal one-third share.

 In a hard fought battle, our client ultimately prevailed at trial and proved that, notwithstanding the titling on the various properties, there was an express agreement among the siblings to equally divide the various accounts.  The trial court imposed a judgment and a substantial attorneys’ fee award, both of which were affirmed by the Court of Appeals.

 In doing so, among other things the Court ruled that ordinarily ownership of a joint bank account with a right of survivorship is conclusive proof of the parties’ intent for the property to pass to the survivor.  However, this general rule does not prevent the survivor from making a different disposition by agreement, and in this case the trial court determined that such an agreement had in fact been made among the siblings.  This is a difficult argument to make, because courts presume that the titling on an account is strong evidence of how that property is to be distributed.  But, if the facts and evidence warrant it, this case demonstrates that a court will sometimes hold that an agreement to divide the property otherwise will prevail over the titling of an account.

 Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

"Murder, Fraud, $2.2 Million Somewhere"

This week's issue of the Arkansas Times  contains a sad but fascinating story written by Mara Leveritt, who is well-known for her writing about so-called "true crime," including but not limited to her book about the West Memphis Three, Devil's Knot.  Specifically, Ms. Leveritt tells the tale of an older gentleman living in Washington state whose trust assets were swindled by a love interest with Arkansas ties, and how the gentleman's son has relentlessly pursued bringing the woman to justice and recovering the monies in question.  The story also contains a link to the family's own website detailing the ordeal, the criminal case, and the civil lawsuits stemming from the fraud.  Interesting reading. 

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, House & Downing, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Random Odds And Ends

A couple of quick things before I head off to celebrate the end of 2010 and the beginning of 2011:

(1) The Wills, Trusts & Estates Prof Blog contained an interesting quote today from the French Enlightenment writer, historian, and philosopher Voltaire, who lived about 300 years ago, which goes to show that the subject matter discussed in my own Blog is hardly new or novel:

"Animals have these advantages over man: they never hear the clock strike, they die without any idea of death, they have no theologians to instruct them, their last moments are not disturbed by unwelcome and unpleasant ceremonies, their funerals cost them nothing, and no one starts lawsuits over their wills."

---Voltaire, French author (1694 - 1778)

(2) A recent article cites a study by the Center For Retirement Research at Boston College for the proposition that Baby Boomers, who apparently have already inherited $2.4 trillion from older generations, are in line to inherit at least $8.4 trillion more.  In fact, according to a December 27, 2010 Associated Press article, starting in January more than 10,000 Baby Boomers a day will turn 65,  a trend that will continue for the next 19 years.  Given those numbers, one can only assume that the number of inheritance-related disputes will continue to rise as well.  

Best wishes for a Happy New Year!

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Recent Articles On Alzheimer's Disease, And Trustee/Beneficiary Relationships

There is not much to this post, primarily because the articles referenced below already thoroughly discuss the issues.  Specifically, both articles shed light upon two common problem areas which can often eventually erupt into estate, trust and probate disputes. 

The first article is from the New York Times and addresses the effect of Alzheimer's Disease and dementia upon an individual's ability to control and account for their finances.  Given our aging population and ever-increasing life expectancy, it's recommended reading for everyone as this concern affects innumerable families in this country. 

The second article is from the Wall Street Journal and touches upon the often-tense relationship between trustees and beneficiaries.   It may especially be interesting and insightful for anyone who already acts as trustee or who may eventually act as a trustee in the future.

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Update On Gary Coleman Estate Dispute

As a child of the 1980's, I grew up watching Diff'rent Strokes like most people my age.  A white, middle-class kid growing up in Oklahoma, I did not have much in common with two African-American orphaned children from Harlem taken in by a rich Park Avenue businessman, but the show constantly had me laughing, especially when Gary Coleman ("Arnold") would throw out his catchphrase "What'choo talkin' bout, Willis?"   So it was disappointing to hear about the recent death of Coleman, whose post-Diff'rent Strokes life was seemingly as scandal-ridden as the lives of his child co-stars on the show, Todd Bridges ("Willis") and Dana Plato ("Kimberly"). 

Coleman was apparently taken advantage of in life (in the early 1990's he successfully sued his parents and business advisor for almost $1.3 million over misappropriation of his $3.8 million trust fund), and now that he has passed away it looks like there may be additional controversy as well.  Specifically, another blogger who writes on similar topics has provided a good update on the documents and characters who are coming out of the woodwork following his death.  Wikipedia of course also has a good summary of his life and recent events. 

Gary Coleman did not have "Michael Jackson money" but it appears that there is still enough to fight over.  Notwithstanding that Coleman filed bankruptcy in 1999, it is possible that the potential heirs fussing over the leftovers havea special interest in the intellectual property and other rights which could conceivably have value in the years to come as the people in my generation watch reruns and relive the glorious(?) early 1980's.

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Federal Appeals Court Rules Against Estate Of Pinup Anna Nicole Smith, "Widow" Of Elderly Texas Billionaire

One of the longest-running estate and trust battles on record added another chapter with the Ninth Circuit Court of Appeals' recent ruling in the saga involving Anna Nicole Smith, now deceased, and her estate's attempt to claim a chunk of her former husband's billion-dollar fortune.  Specifically,  Anna Nicole, stripper-turned-Playboy model-turned-pop-celebrity, married elderly oil magnate J. Howard Marshall in the last year of his life.  She later claimed that Marshall promised her over $300 million although there was apparently no written documentation supporting the gift. 

A msnbc.com article from a couple of days ago summarizes the 15-year legal battle and also contains a link to the 68-page ruling: 

"The convoluted dispute over J. Howard Marshall's money has its roots in a Houston strip club where he met Smith. The two were wed in 1994 when he was 89 and she 26. Marshall died the next year and his will left his estate to his son.

Smith challenged the will in a Houston probate court, alleging the billionaire's son illegally coerced his father to exclude the former Playboy model from sharing the estate. She alleged that her husband promised to leave her more than $300 million above the $7 million in cash and gifts showered on her during their 14-month marriage.

While the probate case was pending in Houston, Smith filed for bankruptcy in Los Angeles, alleging in federal court filings that her husband promised her a large share of the estate.

In late 2000, the bankruptcy court awarded Smith $474.75 million, which a federal district judge reduced to $89.5 million in 2002.

Between those two decisions, a jury in the Houston probate court ruled in March 2001 against Smith. The jury found the billionaire was mentally fit and under no duress when he wrote out a will that left everything to his son.

Since then, the two sides have been fighting over which court to obey.

Smith argued that the federal courts were in charge because the bankruptcy court was the first to rule.

Pierce Marshall countered the decision was the jurisdiction of the probate court, because that's where the first legal action was filed and the site of the only full-blown trial."

Ultimately the Ninth Circuit Court of Appeals agreed with the estate of Marshall's son (who died in 2006) and against the estate of Anna Nicole (you will recall that she died of an apparent drug overdose at age 39 in 2007).  Specifically, the Court held that the bankruptcy court did not have authority to decide a probate dispute such that its $475.75 million award was a mere advisory opinion.  The Court also concluded that the lower court should have relied upon the probate jury's verdict against Anna Nicole and dismissed the entire case rather than merely reducing the award to almost $90 million. 

Matt House can be contacted by telephone at 501-372-6555, by e-mail at mhouse@jamesandhouse.com, by facsimile at 501-372-6333, or by regular mail at James, Fink & House, P.A., Post Office Box 3585, Little Rock, Arkansas 72203.

Court Rules Handwritten Note Found By Deceased's Mother Did Not Result In Change Of IRA Beneficiary

As previously discussed on this Blog, a common fact scenario in estate, trust and probate lawsuits involves an eleventh-hour change in a dying person's final wishes regarding their property.  Quite often the last-minute decision appears legitimate, although occasionally there is an aura of suspicious facts and circumstances surrounding the event which arises to the level of an "inheritance theft."  Frequently the change in question is expressed in the form of a handwritten note, and courts are commonly called upon to rule whether or not such "wishes" will actually be  enforced.

On January 27, 2010, the Arkansas Court of Appeals addressed a somewhat similar situation in the case of Nunneman v. Estate of Donald T. Grubbs, et al, Case No. 2010 Ark.App. 75.  Specifically, Mr. Grubbs had named Ms. Nunnenman as beneficiary of his IRA, and a few days before his death evidently called a lawyer to his hospital bed and executed a will, leaving all of his property to his mother, Ms. Grubbs.  She then asked the Court to freeze certain IRA monies contending that she had discovered a 2005 note in Mr. Grubbs' bible which stated:  "My Will.  I Donnie Grubbs want all of my estate All IRA and any SBC Telco and all other assets and worldly goods to go to my Mother Shervena Grubbs.  Being of sound mind.  Donnie Grubbs."  Ms. Grubbs alleged that she had found the note in the presence of a coworker, but that witness claimed that she had not known of the note's existence before the trial. 

After considering the evidence, the trial court ruled that the handwritten note should have the effect of changing the IRA beneficiary.  Ms. Nunnenman appealed and the Arkansas Court of Appeals reversed the trial court, ruling that it was clear error to find an effective change of the IRA beneficiary.  Specifically, the Court pointed to the conflicts in the testimony regarding the discovery of the note and also focused upon the fact that the very person who discovered the note was the same person who would end up benefitting from its discovery.  The Court also opined that it was significant that while Mr. Grubbs had undertaken steps to call a lawyer to come to his bedside, he had not taken similar measures to change his IRA beneficiary. 

In sum, this case is a good example of the heavy burden that a party has when attempting to prove a change in property disposition by means of a handwritten document.  As a general matter the Court will need to be presented with a strong showing of evidence before favorably considering such a request. 

Billionaire's Former Lover's Shenanigans Fail In Will Contest

Most estate and trust conflicts for which our law firm is retained, either to represent the fiduciary (executor, trustee, etc.) or the beneficiary to whom the fiduciary duty is owed, involve anywhere from several hundred thousand dollars to several million dollars.  The fact is that the substantial time and expense associated with litigating smaller amounts in dispute can often be cost-prohibitive for the client.  Because the matters that we assist with typically involve family fortunes within the above-described range, wealth wars erupting over $4.2-plus billion are rare indeed.

However, that is precisely what occurred as recently noted in a February 2, 2010 post by the Michigan Probate Law Blog, in the case of Hong Kong tycoon Nina Wang.  Asia's wealthiest woman, she died of cancer in 2007 at the age of 69.  Following her passing, a gentleman named Tony Chan, who also was her former lover and feng shui master, revealed a 2006 will which purported to leave her entire fortune (which has been estimated to possibly range up to $13 billion) to him instead of to charity.  In what might be the mother of all will contests, the Court ruled that the will was a forgery and that the signatures contained on the document were a "highly skilled simulation."  In fact, in a 326-page opinion, the court held that Mr. Chan "lied and withheld relevant information from the court regarding the circumstances leading to the preparation of the document." 

Lost in the fact that Mr. Chan has apparently now been arrested for his shenanigans is the fact that another will of Ms. Wang's actually bequested $10 million to Mr. Chan.  Seems like Mr. Chan could have benefitted from a phrase that we often toss around here in Razorback country, which rings especially true in this case:  "Pigs get fat, hogs get slaughtered."   

UPDATED: Dispute Erupts Over Wealth Of Deceased Billionaire Shopping Mall Developer

Pretty much anyone who has lived in Central Arkansas over the last few decades has been aware of if not actually visited University Mall in Little Rock's midtown area.  While it used to be the hot spot for shopping many moons ago, in more recent years it became better known for its empty stores and the litigation that resulted from disputes over the mall's management.  The mall closed in 2007, demolition began in 2008, and a brand new mixed-use development appears imminent for the property in the next year or two.  

Anyone familiar with University Mall is also undoubtedly aware of its close proximity to Park Plaza Mall.  Ever since moving to Arkansas back in 1992, I never understood why University was built almost literally next door to Park Plaza (built a few years earlier in 1959), yet another enclosed shopping mall.  But I guess that's why I'm a mere lawyer and the folks who make the big bucks are mall magnates like Melvin Simon. 

Specifically, University Mall was developed by Melvin Simon & Associates, an Indianapolis-based real estate development and management company which later became known as Simon Property Group.  I mention this because Simon Property Group is evidently the largest public U.S. real estate company, and shopping mall development made the company's namesake---Mr. Simon---a very wealthy man.  He and his brother, who also co-founded the company, eventually purchased the Indiana Pacers franchise of the National Basketball Association. 

According to a recent post on the Florida Probate & Trust Litigation Blog,  the Wall Street Journal writes that a wealth war has begun over the terms of Mr. Simon's will.  Apparently, Mr. Simon's wife was only supposed to receive approximately one-third of his fortune and, after some changes were evidently made to his will a few months before his death, she now stands to receive about one-half.  Considering that his wealth has been estimated at $1-2 billion depending upon the fluctuating stock price of his company, even minor changes in his will could amount to a major redistribution of wealth.  Notably, the changes cut out Mr. Simon's three children from his first marriage.  

At least one of those children is now suing Mrs. Simon, their stepmother, contending that she unduly influenced Mr. Simon and persuaded him to change his will to reduce the children's inheritances.  The lawsuit also alleges that Mr. Simon had dementia and needed assistance signing the document, to which Mrs. Simon has now apparently responded that while he did in fact have Parkinson's Disease and needed help with his signature, he voluntarily signed a new will and trust of his own free will.  This will be a wealth war worth watching in the next few months. 

Seemingly sudden changes to wills and trusts shortly before someone dies are one of the most common disputes arising in estate, trust and probate litigation.  As the Baby Boomer generation begins to retire and ultimately pass away, there will no doubt be millions more similar disputes in the decades to come. 

UPDATE:  The following link contains the latest update (as of 2/11/10) from the Wall Street Journal.

American Bar Association Releases "Legal Guide For The Seriously Ill: Seven Key Steps To Get Your Affairs In Order"

Estate, trust and probate litigation often involves allegations that elderly adults' estate planning desires were not carried out after their deaths (either by someone's intentional acts or negligence), or that those elderly adults were taken advantage of and their estate planning desires were thwarted while they were still living (albeit without their knowledge or consent).  With respect to the latter scenario, sometimes the claims are true, and sometimes they aren't.  Issues of (in)competency, illness, undue influence, and fraud are often raised in these types of proceedings.   Each case is different and we have certainly represented those doing the accusing as well as those being accused. 

But one common theme that I have noticed in virtually all of these cases is that no matter how much estate planning that the elderly person actually did, in virtually every situation they probably could have done a bit more.  It might not have ultimately made a difference with respect to whether or not litigation would have resulted, but where more planning is undertaken that can frequently result in a lesser likelihood of later conflict. 

With this in mind, thanks to a tip on the Wills, Trusts & Estates Blog, the American Bar Association has apparently just released the "Legal Guide For The Seriously Ill: Seven Key Steps To Get Your Affairs In Order."  I've given the document an overview and  would heartily recommend it to anyone dealing with such circumstances (or anyone with a loved one who is dealing with this situation).

UPDATED: Sentencing Time In The Ultimate Wealth War: The Astor Family Fortune

As we are in the midst of the holiday season and families all around the world are coming together to enjoy each other's company for a few fun-filled days (or in some cases a couple of miserable hours), it can be a little disheartening to read about (much less write about) another wealth war in the news.  However, this one is pretty spicy, has a celebrity aspect to it (Barbara Walters and Henry Kissinger were witnesses at the underlying trial), and even has some criminal twists and turns. 

Specifically, msnbc.com had an article today which contains one of the more extreme examples of an estate and trust battle.  I was vaguely familiar with Brooke Astor, or rather her last name due to her philanthropy, but became much more interested after hearing and reading of the unfortunate last few years of her life in which she was apparently taken advantage of by her only child.  Mrs. Astor's third husband, Vincent Astor, was a descendant of John Jacob Astor, whose fortune was accumulated in fur trading and real estate.  Mr. Astor was one of the first multimillionaires, and Mrs. Astor ultimately gave away almost $200 million to institutions and was given a Presidential Medal of Freedom for her generosity.  She passed away in 2007 with many more tens of millions in her portfolio. 

According to the msnbc.com article, Anthony Marshall, Mrs. Astor's son, apparently led a successful, well-regarded life until one of his own sons, Phillip Marshall, exposed his father's apparent abuse of his mother (Phillip's grandmother) and her wealth in the course of a 2006 civil suit.  The stealing of her fortune was evidently so bad that the 85 year old Marshall actually was convicted of crimes a couple of months ago after a 5 month long trial and now faces sentencing next week, along with an estate lawyer who was likewise convicted of shenanigans associated with Mrs. Astor's fortune.  The case is rather intriguing given the fact that celebrities such as Whoopi Goldberg and Al Roker have come to his defense and pleaded for leniency from the sentencing judge.  Only time will tell whether he actually receives it, as there were tales told at trial of Papa Marshall engaging in gamesmanship with respect to Mrs. Astor's will so as to benefit him over her favorite charities, stealing her artwork, and giving himself a million dollar raise for his efforts in managing her wealth. 

As a lawyer who has previously worked on many white collar criminal defense matters, I speak from some experience in stating that white collar crime is pretty rarely prosecuted.  The public seems to be more taken aback by crimes of drugs, sex, and violence, and therefore the politicians and the strapped resources of governmental officials are largely dedicated to prosecuting those types of crimes.  White collar crimes are also typically complex, document-intensive, and often go uncovered much less unprosecuted. 

The Astor/Marshall case, however, is one instance in which the facts and circumstances can occasionally be so bad that they warrant more than a civil suit and instead the intervention of criminal investigators.  I do not know why, for instance, stealing $100,000 from a relative by altering some documents is any less of a prosecutable crime than stealing a carton of cigarettes from a convenience store, but for some reason it seems like the latter is much more likely to receive the attention of the law enforcement authorities.  In any event, the Astor/Marshall case contains lessons for lawyers and wealthy individuals alike in ensuring that the estate planning and trust administration processes are as free of hanky-panky as possible. 

UPDATED:  According to msnbc.com, Phillip Marshall was sentenced to 1-3 years in prison, although he may be able to stay out of prison on bail pending appeal.  According to the New York Times, Mr. Marshall's lawyer apparently received the same sentence.

Videotaping As Possible Way To Preclude Estate, Trust & Probate Litigation

You may remember a movie from 15 or so years ago called "My Life," starring Michael Keaton and Nicole Kidman, in which a terminally ill man films a video for his unborn child to watch after the man passes away after a fight with cancer.  The father essentially wanted the child to know who the father was and what the father had learned in his own life, since he would not be around when the child was growing up. 

While the movie was not focused upon an estate or trust battle, I was still reminded of "My Life" yesterday when reading the December 7, 2009 post on the Wills, Trusts & Estates Prof Blog, which had an interesting link to a December 3, 2009 Wall Street Journal article written by Kristen McNamara and entitled "Lights, Camera . . . Last Words."  The article discussed videos as a way of allowing the dying to say a few last words and also possibly prevent legal disputes regarding property division after death.  Here is an excerpt from the Blog and the article itself:

"Some individuals have found a way to breathe life into dry estate-planning documents: They're supplementing them with personal messages via video.

With guidance—and caveats—from attorneys and financial advisers, some elderly and terminally ill individuals, and even some young parents, are picking up video cameras or hiring professional videographers to share their life stories, express hopes for younger generations and explain why they're leaving certain assets to certain family members. * * *

[E]xperts say that while videos can head off disputes, if not carefully executed, they also can backfire. * * *

A video may make sense if you are concerned that an heir will claim you weren't competent when you signed estate-planning documents or were pressured to distribute your assets a certain way, estate-planning attorneys say. Videos in which lucid individuals review their wills with their attorneys and answer questions that demonstrate their understanding of the documents and confirm they weren't coerced into any decisions can be useful in rebuffing challenges, they say. Such videos are typically filmed during a will-signing in an attorney's office and are kept by the attorney, along with the estate-planning documents. * * *

Attorneys generally caution against homemade videos, saying they are more likely to cause problems than those produced in consultation with an attorney. A video filmed by a beneficiary, for example, could give rise to conflict-of-interest questions. And, whether filmed professionally or not, a video in which a person looks ill or uneasy could raise questions about his or her cognitive abilities."

My personal view on this is that---overall---technology is a good thing and if it can be used to help rather than hinder in the course of estate planning, then it should be considered as part of the process.  After all, there is little doubt in the criminal context that many a disputed traffic stop, questioned search and seizure, and controversial police station interrogation could be averted if such proceedings were videotaped to ward off the "he said, she said" nature of these events.  Likewise, it seems that if an individual had a video camera and (vis-a-vis an objective, detached cameraman) proceeded to film a will or trust signing ceremony, held up each page of the document to the camera, interviewed or showed the witnesses and other participants, videotaped the actual signatures and notarizations, and otherwise allowed the individual to talk at length during the proceeding, that this could conceivably preclude many a disputed proceeding involving fraud, undue influence, and the like. 

New Book And Television Series Coming Out About Estate, Trust & Probate Battles

The estate, trust, and probate disputes and lawsuits that one reads about in the newspapers and which we commonly see in our law practice can seem like a television or movie drama.  Common threads running through these battles frequently include prominent characters in the community, tales of large sums of money flying around, allegations of complex conspiracies, questions regarding how a person died, disputes about the execution of certain documents, and claims of fraud and other wrongdoing.  In fact, these are probably the same human elements and reasons why I tend to find this area of law so interesting.  Perhaps it is also the reason why a new book and television series are coming out relating to these estate, trust and probate battles. 

Specifically, two Michigan lawyers, Andrew and Danielle Mayoras (who also author the Probate Lawyer Blog) have written Trial & Heirs:  Famous Fortune Fights which is described as a book containing "juicy details on famous cases."  While giving the reader "a front row seat in the courtroom," the authors also seek to "replay the scenarios and point out what went wrong, the winners and losers, and what you can learn from it."  The book is available for purchase at the above link.   

Also, the December 2, 2009 entry on the Wills, Trusts & Estates Prof Blog reports that a Canadian-based TV production company is shooting a new documentary series entitled "The Will," which will apparently reveal "the true life stories of complex and surprising disputes that have arisen surrounding a will, estate or trust."  The link summarizes how to participate in the series or submit a case that you think they should profile, and states that "they are looking for dramatic, unusual stories with numerous twists and turns, secrets and real emotion."  Most estate, trust and probate battles that we have handled seem to meet that criteria, but apparently one condition for being profiled in the TV series is that the cases must have reached a final decision or settlement in order to be considered.